Canada: AGCO Releases Registrar's Standards For The Private Retail Sale Of Cannabis

Last Updated: December 12 2018
Article by Whitney Abrams

Today, the AGCO released the  Registrar’s Standards for Cannabis Retail Stores (the “Standards”), which have been created under the authority provided to the Registrar by the Cannabis Licence Act, 2018 and Regulation 468/18. 

The Standards  will govern the behavior and activities of Retail Operator Licence holders and Retail Manager Licence Holders (“Licensees”)

The AGCO has indicated that the Standards  are to be reviewed and revised regularly to ensure that they are effective in mitigating risks as the cannabis retail sector matures.  In our opinion, this is an important approach in order to be flexible and to adequately enforce a logical regulatory model.  This approach is consistent with the AGCO’s stated intention to “shift the focus from requiring licensees to comply with a specific set of rules or processes, towards the broader regulatory outcome or objectives they are expected to achieve.” The AGCO recognizes that there is not one best way to meet the Standards and encourages alternative approaches so long as they fit within the requirements of the Standards. 

The Standards have been designed broadly enough to cover a wide range of activities, and it is likely that Licensees will adopt the Standards  as part of their own SOPs for their operations.  Here are some of the highlights of the Standards:

Store Premises, Equipment and Facilities

The Standards, as expected, require that the store premises be highly secure and protected against unauthorized access.  Minors under the age of 19 need to be restricted in store from making any purchases of cannabis or cannabis accessories. 

The premises may not have any visible cannabis or accessories from outside the store. 

Also as expected and seen in other provinces Canada, the Standards indicate that Licensees will be permitted to use sensory display containers to allow patrons to see and smell cannabis.  The containers must be locked and tamper proof to prevent touching the cannabis and they must be secured so that they cannot be removed from the store. 

Licensees must ensure that there are reasonable safeguards around data security and protection of data integrity.  The point of sale systems employed by the store must be certified by a recognized industry certification body or organization and have logging capabilities for the purposes of regular monitoring (and to comply with record keeping requirements, discussed below). 

Surveillance and Security

At each storefront, a secure, high-resolution surveillance system must be in place and functioning properly at all times.  This will involve 24 hour coverage of the interior of the premises and immediately outside the premises at entrances and exits, point of sale areas, receiving areas, sales floor areas, and cannabis storage areas.  It will be the responsibility of the Licensee to maintain recordings for a minimum of 30 days and to have the capability to produce the recordings to the AGCO if that request is made. 

Safe Handling of Cannabis

All cannabis must be stored securely and be only accessible by staff.  The Standards also intitute specific procedures to undertake in the event that cannabis must be destroyed or destructed.  The Standards  not only indicate the requirements of the method of destruction but also require the frequency of destruction and that the destruction be recorded on the premises’ surveillance system. 

Similarly, in the event of a product recall, the Standards  set out specifics for transfer and transportation of cannabis back to the Licensed Producer who issued the recall. 

Advertising and Promotional Activities

The Standards have borrowed from the Federal Cannabis Act  in restricting what may be included by way of language or images on exterior signage of the store.  The language which we have seen before, prohibits any signage that:

  • appeals to young persons;
  • contains testimonials or endorsements;
  • depicts a person, character, or animal, whether real or fictional;
  • presents cannabis or a cannabis accessory in a manner that associates it with or evokes a positive or negative emotion or image of a way of life such as one that includes glamour, recreation, excitement, vitality, risk, or daring.

The Standards also prohibit signage that:

  • promotes cannabis or cannabis accessories in a way that is false, misleading, or deceptive;
  • makes an association with medicine, health, or pharmaceuticals; and/or
  • associates consumption of cannabis with driving a motorized vehicle, or with any activity that requires care and skill or has elements of danger. 

Under the Standards, Licensees may only promote cannabis or cannabis accessories under limited circumstances.  It is expected that Licensees will face similar challenges to Licensed Producers in differentiating themselves and obtaining brand recognition, given these hurdles. 

Training to Promote Responsible Use and Sale of Cannabis

Under the Standards, Licensees must ensure that certain information related to the responsible use of cannabis is available to patrons.  For starters, this includes the “Health Canada Consumer Information – Cannabis” document,  available here.

Record Keeping Requirements

Licensees will be required to keep a long list of records, ranging from all of the cannabis going through the authorized store location, to employee records, to records of any cannabis which has been destroyed.  Licensees will need to do a full inventory count of all cannabis on a weekly basis at a minimum and report any discrepancies to the AGCO. 

Licensees will be required to maintain these records for a minimum of 3 years or longer, depending on what is required by other regulations or laws. 

The Standards also, unsurprisingly, require that all records kept must enable the Licensee to participate in the national cannabis tracking system established under the federal Cannabis Act, as well as records which will prove compliance with sections 7 and 8 of the Cannabis Control Act, 2017. 

The AGCO has stated that it will continue to release more information in the coming days and weeks about requirements for retail store requirements. Continue to check CCL for timely and informative updates as they become available!  

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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