Transcript: Cannabis and Private Sector Retailing | Oct 16, 2018

Steve sits in the studio. He's slim, clean-shaven, in his fifties, with short curly brown hair. He's wearing a gray suit, pink shirt, and striped lavender tie.

A caption on screen reads "Buying and selling bud in Ontario. @spaikin, @theagenda."

Steve says EVERY PROVINCE IS
DOING IT DIFFERENTLY, AND WHILE
ONTARIO UNDER THE PREVIOUS
LIBERAL GOVERNMENT HAD TAPPED
THE LCBO TO HANDLE THE SALE OF
CANNABIS, THE NEW PC GOVERNMENT
SCRAPPED THAT ROUTE AND HAS
OPTED FOR A PRIVATE SECTOR MODEL
INSTEAD.
HERE TO GET US UP TO SPEED ON
THE NEW APPROACH, ADAM VASSOS OF
VASSOS LAW, WHICH SPECIALIZES IN
REGULATORY AND LICENSING ISSUES
AROUND ALCOHOL AND NOW CANNABIS.

Adam is in his forties, with short gray hair and a stubble. He's wearing a gray suit, white shirt, and purple tie.

Steve continues GOOD TO HAVE YOU HERE, ADAM.
GOOD TO MEET YOU.

Adam says THANK YOU FOR INVITING ME.

Steve says LET'S LET EVERYBODY
KNOW THAT...

A slate appears on screen, with the title "The new cannabis regime."

Steve reads data from the slate and says
ON-LINE SALES, OF
COURSE, OCTOBER 17th, THAT'S TOMORROW.
START TO COME IN.
RETAIL STORES, HOWEVER, NOT OPEN
UNTIL APRIL 1st OF NEXT YEAR.
THE SALE OF CANNABIS WILL BE
PROHIBITED TO ANYONE UNDER THE
AGE OF 19.
PEOPLE CAN BUY 30 GRAMS OF
CANNABIS AT A TIME FOR PERSONAL
USE.
THE ALCOHOL AND GAMING
COMMISSION OF ONTARIO WILL BE
THE PROVINCIAL REGULATOR.
AND MUNICIPALITIES WILL HAVE A
ONE-TIME OPTION OF OPTING OUT OF
HAVING PHYSICAL SISTERS IN THEIR
BOUNDARIES AFTER THE MUNICIPAL
ELECTIONS AND NEXT
JANUARY 22nd IS THE DEAD RYAN
FOR DECIDING...
IS THE DEADLINE FOR DECIDING.
ANY IDEA WHY THE NEW GOVERNMENT
DECIDED TO DO A 180 FROM THE WAY
THE PREVIOUS GOVERNMENT HAD SET
IT UP?

The caption changes to "Adam Vassos. Vassos Law."
Then, it changes again to "Weed distribution."

Adam says WELL, ACCORDING TO THE WORD
ON THE STREET, IT'S ALL ABOUT
SMALL BUSINESS.
THE NEW ONTARIO GOVERNMENT
WANTED TO GIVE SMALL BUSINESS AN
OPPORTUNITY TO PARTICIPATE IN
THE PROCESS.
NOT ONLY AS OWNERS AND OPERATORS
BUT ALSO AS EMPLOYEES SO AS
OPPOSED TO WORKING WITH THE
GOVERNMENT, YOU'RE NOW WORKING
FOR YOURSELF.

Steve says I WONDER IF IT IS
THE CHASE THERE IS LESS PUBLIC
SAFETY OVERSIGHT IF THE PRIVATE
SECTOR RUNS THINGS AS OPPOSED TO
HAVING A GOVERNMENT AGENCY DO
IT?

Adam says WELL, THAT'S THE BIG
QUESTION, ISN'T IT?
AND AT THE END OF THE DAY, A LOT
OF PEOPLE BELIEVE THAT
GOVERNMENTS SHOULDN'T BE IN THE
BUSINESS OF ANYTHING, PERIOD.
THE GOVERNMENTS SHOULD BE IN THE
BUSINESS OF RUNNING THE PROVINCE
AND THAT'S IT.
IT'S A BROCK SCHISM IN HE WERE
ITS OF PUBLIC SAFETY, THAT COMES
DOWN TO HOW WELL TRAINED THE
STAFF ARE THAT WORK IN THESE
LOCATES, HOW KNOWLEDGEABLE THEY
ARE ABOUT THE PRODUCT THAT
THEY'RE SELLING AND HOW
CONCERNED THE OWNERS AND
OPERATORS ARE WITH ENSURING
PUBLIC SAFETY.

Steve says SHOULD WE VERY IN
CONCERN THAT PRIVATE SECTOR
FOLKS CAN DO THIS?

Adam says ABSOLUTELY NOT.
I BELIEVE THAT PRIVATE SECTOR
FOLKS WILL DO JUST AS GOOD IF
NOT A BETTER JOB BECAUSE THEY'RE
COMPETING AGAINST EACH OTHER.
IF IT WAS THE OTHER WAY AROUND,
THEN YOU HAVE THE ONTARIO
CANNABIS STORE DOING IT, THERE
WOULD BE NO COMPETITION.
ESSENTIALLY IT WOULD BE A
MONOPOLY.

Steve says THE ONTARIO CANNABIS
STORE, TOCS FOR SHORT, WHAT
FUNCTION WAS THAT SET UP AS?

Adam says ORIGINALLY, IT WAS GOING TO
BE THE OPERATOR OF THE RETAIL
CANNABIS STORES AS WELL AS THE
ON-LINE SALES.
THAT'S NOW CHANGED.
THEY WILL BE DOING ON-LINE SALES
COMMENCING TOMORROW.
AND UNTIL APRIL WHEN THE RETAIL
CANNABIS STORES WILL OPEN.
AT THAT POINT, THEY'LL BECOME
STRICTLY A WHOLESALER OF
CANNABIS TO THE PRIVATELY OWNED.

Steve says SO IS THE RETAILERS
WILL GO TO THE ONTARIO CANNABIS
STORE TO BUY THEIR PRODUCT AND
THEN THEY MARKET IT HOWEVER THEY
WANT.

Adam says YES, IMAGINE THE LCBO NOT
HAVING ITS OWN STORES BUT JUST
BEING THE WHOLESALER.
IT WILL BE EXACTLY THE SAME
THING.

Steve says RIGHT.
THE ALCOHOL AND GAMING
COMMISSION OF ONTARIO ALREADY
GRANTS ALCOHOL LICENSES.
ARE THEY GOING TO RUN THE
CANNABIS LICENSING SYSTEM THE
SAME WAY?

The caption changes to "Licenced to sell."

Adam says YES.
YES, IT WILL BE VERY SIMILAR.
I MEAN, THE ALCOHOL AND GAMING
COMMISSION, IT'S A REGULATORY
BODY AND RIGHT NOW IT OVERSEES
HORSE RACING, ALCOHOL, GAMING
AND LOTTERY.
THEY'RE GOING TO ADD CANNABIS
NOW TO THAT AREA THAT THEY
REGULATE SO NOT ONLY WILL THEY
BE ISSUING THE LICENSE BUT
THEY'LL
BE CONDUCTING ALL THE DUE
DILIGENCE THAT'S INVOLVED WITH
GRANTING THE LICENSES, LOOKING
INTO THE BACKGROUND.

Steve says WHAT ARE THEY
LOOKING FOR IN A PROSPECTIVE
LICENSEE?

Adam says EVERYTHING.
THEY'RE EXTREMELY CONCERNED
BECAUSE, AGAIN, IT'S ABOUT
PUBLIC SAFETY BUT IT'S ALSO
ABOUT MAKING SURE THE BLACK
MARKET IS GONE.
THEY ARE LOOKING WHERE THE MONEY
IS GOING.
THEY WANT TO MAKE SURE THEY'RE
LEGITIMATE BUSINESS PEOPLE AND
THAT THEY WERE NEVER INVOLVED IN
THE BLACK MARKET AND I THINK
THAT'S WHAT THE MAGIC SEASON ALL
ABOUT.

Steve says IF YOU'RE IN THE
BLACK MARKET, YOU OBVIOUSLY
DON'T NECESSARILY HAVE A
CRIMINAL RECORD.
SO I SHOULD ASK YOU ABOUT THAT.
INSPECT YOU HAVE A CRIMINAL
RECORD, CAN YOU GO ASK FOR A
LICENSE TO RETAIL MARIJUANA?

Adam says YES.
WELL, THAT'S WHAT WE'VE BEEN
TOLD BY THE ATTORNEY GENERAL.
SO THE BIGGEST CONCERN THE
ATTORNEY GENERAL SEEMED TO
HAVE IN HER ANNOUNCE SYSTEM AS
LONG AS YOU ARE NOT INVOLVED IN
THE SALE OF CANNABIS COME
OCTOBER 17th, THERE WILL BE NO
PROHIBITION AGAINST YOU FROM
OPENING OR APPLYING FOR A
LICENSE FOR A RETAIL CANNABIS
STORE.

Steve says WHAT IF YOU DIDN'T
HAVE A SIGN OUTSIDE BUT
EVERYBODY KNEW WHO WAS GOING ON
THERE AND YOU HAD BEEN BUSTED
FROM TIME TO TIME AND YOU WANT
TO GET A LICENSE.
YOU HAVE THE EXPERTISE HAVING
BEEN IN THE FIELD FOR A WHILE
BUT YOU HAVE A CRIMINAL RECORD.
WOULD THAT BE A PROBLEM?

Adam says APPARENTLY, IF YOU'RE NOT
CHARGED UNDER THE CANNABIS ACT
AFTER OCTOBER 17th, YOU CAN
APPLY FOR A LICENSE.

Steve says IF YOU JUST WANT TO
SET UP A LITTLE CORNER MOM AND
POP CANNABIS SALES OUTLET, WHAT
ARE YOUR CHANCES OF GETTING A
LICENSE?

Adam says WELL, THE EVERYBODY WITH THAT
IS THERE'S GOING TO BE
REGULATIONS AND THEY HAVEN'T
DROPPED YET, STEVE.
BUT THERE WILL BE REGULATIONS
ABOUT THE SAFETY AND SECURITY
AND THE PROTOCOLS THAT ARE GOING
TO BE REQUIRED FOR A LOCATION.
WE ANTICIPATE THAT THE AVERAGE
COST OF A STORE AT THE LOW END
WILL BE ABOUT 2 TO 400,000 dollars AND
GOING UP FROM THERE INTO THE
MILLIONS.
SO A SMALL MOM AND POP PLACE IF
THEY HAD A BUDGET OF 2 TO
400,000 dollars, ABSOLUTELY, THEY COULD
APPLY FOR IT.
BUT IF THEIR BUDGET WAS A LOT
LOWER THAN THAT AND THEY
COULDN'T MEET THE SAFETY
QUALIFICATIONS AND THE
REQUIREMENTS, THEN IT'S UNLIKELY
THEY'LL BE ABLE TO OBTAIN A
LICENSE.

Steve says IS IT YOUR
EXPECTATION THAT IT WILL BE
LARGE COMPANIES WITH MULTIPLE
LOCATIONS THAT END UP BASICALLY
CORNERING THE MARK HERE?

Adam says IT'S POSSIBLE.
ALTHOUGH THE GOVERNMENT AND THE
AGCO HAVE HINTED THERE MAY BE
RESTRICTIONS ON THE NUMBER OF
LOCATIONS THAT ONE ENTITY OR ONE
PERSON CAN OWN.

Steve says THEY HAVEN'T SET
THAT NUMBER YET?

Adam says IT HASN'T BEEN SET YET, NO.

Steve says THIS IS YOUR
BUSINESS, RIGHT?
WHO ARE THE KINDS OF PEOPLE...
YOU DON'T HAVE TO GIVE US NAMES,
OBVIOUSLY, BUT WHAT KINDS OF
PEOPLE ARE COMING FORWARD ASKING
FOR YOUR ADVICE.

Adam says WE HAVE MOM AND POP
OPERATORS, WE HAVE MIS-SIZE
PEOPLE AND WE HAVE... MID-SIZE
PEOPLE AND CLIENTS THAT WANT TO
OPEN UP IN EXCESS OF 150
PROVINCE ALL ACROSS THE
PROVINCE.
BUT THAT'S WHAT YOU WANT.
YOU WANT INVEST.
YOU WANT PEOPLE WHO ARE GOING TO
BE SERIOUS ABOUT OPERATING A
STORE PROPERLY WHO ARE GOING TO
FOLLOW THE REGULATIONS WHO ARE
GOING TO TRAIN THEIR STAFF TO
ENSURE PUBLIC SAFETY AND PUBLIC
SECURITY IS ADHERED TO.

Steve says HAS THE PROVINCE YET
SAID HOW MANY TOTAL STORES THEY
WILL ALLOW LICENSED IN THE
PROVINCE?

Adam says AT THIS POINT IN TIME, OUR
UNDERSTANDING IS IT'S UNLIMITED
AND WE'RE EXPECTING THERE WILL
BE THOUSANDS OF APPLICATIONS
WHEN THE APPLICATION PROCESS
DROPS.

Steve says RIGHT.
AND PRESUMABLY SOME OF THOSE
APPLICANTS WILL BE DENIED.
ONCE YOU'VE BEEN DENIED, CAN YOU
REAPPLY ANOTHER TIME DOWN THE
ROAD?

Adam says THE LEGISLATION ISN'T OUT
YET, BUT BASED ON HOW IT WAS
EXPLAINED IN THE DISCUSSION THAT
HAS OCCURRED BETWEEN OUR FINANCE
MINISTER AND OUR ATTORNEY
GENERAL, IT SEEMS TO BE A
ONE-STRIKE PROCESS.
I THINK THE TERM THEY USED WAS
ZERO TOLERANCE WHICH TO ME WOULD
SAY IF YOU'RE DENIED OR IF IT
YOU HAVE A LICENSE REVOKED FOR
ANY REASON, BECAUSE THAT COULD
HAPPEN WHILE EUROPE RATING,
THAT'S IT, YOU'RE DONE, GAME
OVER.
SO PROBABLY A LIFETIME BAN A
POSSIBILITY.

Steve says LET ME READ YOU THIS
HERE BACK IN THE TORONTO STAR IN
AUGUST.
INITIALLY, THEY WRITE, THE
OCS...

A quote appears on screen, under the title "NIMBY." The quote reads "Initially, the OCS planned to open just 40 stores across the province, increasing to 150 in total by the end of 2020. The province determined where these stores would be located, with local municipalities having an opportunity to provide input on the locations.
Depending on what happens with the regulation and licencing process, private retailers will likely be able to open a larger number of stores more quickly. This could lead to disagreements, however, if residents seek to keep retailers out of their neighbourhoods."
Quoted from Tony Coulson and Curtis Brown, Toronto Star. August 7, 2018.

Steve says DO WE KNOW IF THE
LEGISLATION HAS SOME PROVISION
IN IT FOR LOCAL INPUT.

The caption changes to "Checks and balances?"

Adam says GREAT QUESTION AND IT'S AN
IMPORTANT QUESTION FOR THE LOCAL
COMMUNITIES.
AT THIS POINT IN TIME, THE
LEGISLATION ISN'T CLEAR.
THERE WILL BE AN OPPORTUNITY AND
THERE'S ALWAYS AN OPPORTUNITY
WITH THE AGCO FOR SOME KIND OF
PUBLIC INPUT.
PRESENTLY IN YOU'RE OPPOSED, FOR
EXAMPLE, TO A LIQUOR LICENSE,
YOU CAN APPLY WITH THE... ALONG
WITH THE APPLICANT, YOU CAN
SUBMIT AN OBJECTION AND THAT
FORCES THE APPLICANT TO EITHER
MEET WITH YOU AND DETERMINE WHAT
YOUR CONCERNS ARE AS A COMMUNITY
GROUP OR AS AN INDIVIDUAL AND IF
YOU CAN'T MEET THAT REQUIREMENT
OF RESOLVING YOUR ISSUES, THEN
YOU'RE AUTOMATICALLY FORCED TO A
HEARING IN FRONT OF THE
LICENSING APPEAL TRIBUNAL.
IT'S UNCLEAR WHETHER THAT WILL
EXIST UNDER THIS POLICY AND IN
TERMS OF PUBLIC UP PUT, IF THERE
WAS PUBLIC INPUT, IT WOULD BE
LIMITED TO PUBLIC INTEREST.
TRUE PUBLIC INTEREST.
SO THERE'S TOO MANY LOCATES
WOULDN'T QUALIFY.
IT'S TOO NOISY WOULDN'T QUALIFY.
WE DON'T WANT IT AROUND BECAUSE
WE THINK IT'S A BAD BUSINESS
IDEA.

Steve says OR IT'S TOO CLOSE TO
A SCHOOL OR WHATEVER, DAYCARE
CENTRE.

Adam says THAT'S DIFFERENT BECAUSE THAT
WILL BE REGULATED.
IT'S EXPECTED THAT THE AGCO AND
THE ONTARIO GOVERNMENT WILL
DETERMINE HOW CLOSE THEY CAN BE
TO PUBLIC FACILITIES SO A
KILOMETRE, HALF A KILOMETRE.
THERE WILL DEFINITELY BE
REQUIREMENTS IN TERMS OF
PROXIMATATION AND LOCATION AND
POSSIBLY EVEN PROXIMITY TO OTHER
STORES SO YOU MAY FIND THERE MAY
NOT BE A STORE PERMITTED WITHIN
500 METRES OF ANOTHER STORE.

Steve says YOU PROBABLY
REMEMBER THIS, TOO IT.
THE WEST END OF TORONTO, HIGH
PARK WAS DRY, NO BOOZE SEAS IN
ANY RESTAURANTS FOR, LIKE, A
HUNDRED YEARS.
THEY HAD A REFERENDUM ONLY
ABOUT, WHAT, 25 YEARS AGO
BECAUSE THE LOCAL RESIDENTS
DESPITE WHAT WAS GOING ON IN THE
REST OF THE PROVINCE, THEY
WANTED THEIR LITTLE PART OF
TORONTO DRY.
CAN YOU IMAGINE THAT KIND OF
THING HAPPENING HERE?

Adam says IF A MUNICIPALITY OPTS OUT,
THEN IT'S OUT.
SO I MEAN, THAT'S THE ONLY WAY I
SEE IT HAPPENING IN HE WERE ITS
IT OF IT BEING DRY.
IN TERMS OF WHAT INFLUENCE THE
LOCAL COMMUNITY OR INDIVIDUAL
OBJECTORS WILL, THAT IS
STILL TO BE SEEN, STEVE.
IT'S NOT CLEAR.

The caption changes to "Producer: Sandra Gionas, @sandragionas."

Steve says OK, ADAM VASSOS
THANKS FOR COMING IN TONIGHT
AND HELPING SET WITH US

Adam says THANK YOU STEVE.

Watch: Cannabis and Private Sector Retailing