Published 12 September 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty
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Get My Free Estimate →The rule changed, and most of the advice online has not caught up. A Retail Store Authorization used to be untransferable, full stop. Then O. Reg. 209/24 added s. 16.1 to O. Reg. 468/18, and as the AGCO put it, on 1 January 2025 the changes “came into effect to allow the transfer of a Retail Store Authorization.” So the store authorization can now move to a buyer with the Registrar’s approval. What did not change: you must already hold your own Retail Operator Licence, and nothing permits the transfer of that licence or of a Cannabis Retail Manager Licence. The store can be bought. The right to operate stores cannot.
What actually changed on 1 January 2025
Section 17(1) of the Cannabis Licence Act, 2018 still reads the way it always did: “A retail operator licence, cannabis retail manager licence or retail store authorization is not transferable to another person, except as permitted by the regulations.” For years the regulations permitted nothing. That last clause was a door with no key behind it.
O. Reg. 209/24 cut the key. It added s. 16.1(1) to O. Reg. 468/18: “The Registrar may transfer a retail store authorization to a person who holds a retail operator licence in accordance with this section.” The AGCO’s own information bulletin is unambiguous about the date and the effect — on 1 January 2025 the changes “came into effect to allow the transfer of a Retail Store Authorization (RSA)” — and it tells prospective buyers that they must be a Retail Operator Licence holder, or must apply for one, “before you can start the transfer application.”
That is a real change. Before it, buying an existing store meant applying for a new authorization at that address and passing every test a greenfield applicant faces. Now there is a second route — with a gate at the front of it, and the gate is your own licence.
Three separate instruments, and only one of them moves
The AGCO issues three things and buyers routinely conflate them. The Retail Operator Licence, under s. 3, is permission for a person to be in cannabis retail at all. The Retail Store Authorization, under s. 4, is permission to operate one specific store at one address. The Cannabis Retail Manager Licence, under s. 5, is held by an individual who performs the management functions in s. 5(1).
| Instrument | What it permits | Can it be transferred to a buyer? |
|---|---|---|
| Retail Operator Licence (Act s. 3) | The person’s right to operate cannabis retail in Ontario | No. Nothing in s. 16.1 permits the transfer of a retail operator licence. The buyer applies for its own |
| Retail Store Authorization (Act s. 4) | Operation of the specific store named in the application | Yes, since 1 January 2025, to a person who holds a retail operator licence, with the Registrar’s approval under O. Reg. 468/18 s. 16.1 |
| Cannabis Retail Manager Licence (Act s. 5) | An individual’s right to perform the s. 5(1) management functions | No. It is personal to the individual who holds it. Section 16.1 does not reach it |
So the shape of the deal is: get your own Retail Operator Licence, then have the store authorization transferred to you. Two steps, in that order.
The genuinely valuable part: a transfer skips two tests
This is the detail that changes how you value an existing store versus a new location, and almost nobody explains it.
Section 16.1(2) sets out what a transfer requires. The transferee must have met the application requirements and paid the fee. It must not be caught by s. 4(4) of the Act. It must be eligible under s. 4(6) of the Act — other than paragraphs 5 and 6. It must not exceed the store cap. And: “No monetary penalties imposed under subsection 14(5) of the Alcohol and Gaming Commission of Ontario Act, 2019 are outstanding against the current holder of the authorization.”
Those two excluded paragraphs are the two hardest tests a new store application faces. Paragraph 5 and paragraph 6 of s. 4(6) are where the public-interest test and the school-distance test live. On a new store application, the Registrar must give notice under s. 4(7), and written submissions on whether issuance “is in the public interest, having regard to the needs and wishes of the residents” must be made “no later than 15 days after the notice is first given” under s. 4(9). And a proposed store may not be located less than 150 metres from a school or private school.
On a transfer, those two do not apply. Read plainly: an existing authorized store keeps the benefit of the approvals it already has. There is no fresh public-notice window for objectors, and the store’s distance from a school is not re-litigated. That is a substantial part of what you are paying for when you buy an operating store rather than opening a new one, and it is the reason a well-sited existing authorization is worth more than an empty unit in the same plaza.
| Test | New store application | Transfer of an existing RSA |
|---|---|---|
| Public interest and municipal/resident notice (Act s. 4(6) para. 5; s. 4(7), 4(9)) | Applies — Registrar gives notice, submissions within 15 days | Excluded by O. Reg. 468/18 s. 16.1(2) |
| 150 metre school separation (Act s. 4(6) para. 6; s. 4(12)(a)) | Applies | Excluded by O. Reg. 468/18 s. 16.1(2) |
| Buyer holds its own Retail Operator Licence | Required | Required — the transferee must be an ROL holder |
| 150-authorization cap (O. Reg. 468/18 s. 12(1)) | Applies | Applies |
| Outstanding monetary penalties against the current holder | Not applicable | Blocks the transfer if any are outstanding |
| Existing conditions on the authorization | Set on issuance | Carried over — Act s. 17(4): subject to the same conditions as immediately before the transfer |
Outstanding monetary penalties are a closing condition, not a footnote
Look again at that requirement: no monetary penalties imposed under s. 14(5) of the Alcohol and Gaming Commission of Ontario Act, 2019 may be outstanding against the current holder of the authorization. Not against you. Against the seller.
That makes the seller’s regulatory record your problem in the most direct possible way. A seller sitting on an unpaid penalty can stop your transfer cold, and the fix is entirely within the seller’s control and none of yours. Make it a vendor representation that no such penalties are outstanding, a vendor covenant that none will be outstanding at closing, and a condition of closing that the Registrar has approved the transfer. And ask, early, for the full compliance history — because s. 17(4) means the conditions already attached to the authorization travel with it to you.
I have found no published AGCO timeline for how long a Retail Operator Licence application or an RSA transfer approval takes, and I am not going to invent one. Anyone who quotes you a number is guessing. That has a direct drafting consequence: your closing must be conditional on the Registrar’s approval of the transfer, with a date driven by the approval rather than by your financing commitment, and with an honest extension mechanism. A firm closing on an assumed approval date is the most expensive mistake available in this transaction.
Who is allowed to own it
Two hard eligibility rules sit in O. Reg. 468/18 and they are not negotiable.
Section 7 caps licensed-producer involvement in both directions. A corporation is not eligible for a retail operator licence if “more than 25 per cent of the corporation is owned or controlled, directly or indirectly, by one or more licensed producers or their affiliates,” or if “the corporation directly or indirectly owns or controls more than 25 per cent of a licensed producer or its affiliates.” If a producer is part of your cap table, or you hold a stake in one, count the percentages before you spend money on diligence.
Section 8 bars a person who “is or has been a member of a criminal organization as defined in subsection 467.1(1) of the Criminal Code (Canada).” Note the tense: “is or has been.”
Then the store cap. Section 12(1) requires the Registrar to refuse an authorization if the applicant, or the applicant and its affiliates between them, “already hold 150 authorizations.” If you are building a chain, that is your ceiling, and affiliates are counted with you.
You have to employ a licensed cannabis retail manager
Paragraph 4 of s. 4(6) makes an applicant ineligible if it “employs or intends to employ an individual who is not the holder of a cannabis retail manager licence to perform any of the functions set out in subsection 5(1).” That is a staffing condition on your eligibility, not a nice-to-have.
And because the manager’s licence is personal and not transferable, the seller’s manager does not come with the store as a matter of law. If that person is central to the operation, their willingness to stay — and the transferability of nothing about their licence — is a diligence item and, frankly, a negotiation item. Ask who holds a Cannabis Retail Manager Licence today, and ask what happens on closing.
The short version
Since 1 January 2025 a Retail Store Authorization can be transferred with the Registrar’s approval, and a transfer skips the public-interest and municipal-notice test and the 150-metre school-distance test that a new store must pass. That is the value in buying an operating store. But you must hold your own Retail Operator Licence first, the operator licence and the manager licence are not transferable at all, existing conditions carry over, and any outstanding monetary penalty against the seller blocks the transfer. AGCO publishes no timeline. Condition your closing on approval, not on a date.
Asset, shares, or transfer — and what the published material does not tell you
There are three ways people think about this deal. Buy the shares of the corporation that holds both the operator licence and the store authorization, and nothing formally moves because the entity does not change. Buy the assets and take a transfer of the store authorization onto your own operator licence. Or buy nothing and apply for a new store, which puts you back in front of the public-interest and school-distance tests.
The AGCO bulletin and s. 16.1 deal with transfers of a store authorization. They do not address the ownership of a licence holder changing hands. So do not assume that a share purchase is invisible to the Registrar because no transfer application is filed. Put that question to counsel and, where appropriate, to the AGCO, before you fix your structure — and note that eligibility under s. 7 and s. 8 attaches to the corporation, which means a change in who owns that corporation is exactly the kind of fact those sections are about.
There is one more thing the Act says that shapes everything: s. 4(5). “A separate application is required in respect of each proposed cannabis retail store, and a retail store authorization that is issued only authorizes the operation of the store specified in the application for the authorization.” Authorizations are addresses. You cannot buy one and move it.
HST and the section 167 election
On an asset purchase of a going concern, the Excise Tax Act allows a joint election at s. 167 where the buyer is acquiring “all or substantially all of the property that can reasonably be regarded as being necessary for the recipient to be capable of carrying on the business.” CRA’s Memorandum 14-4 reads that as generally 90% or more of the fair market value of the necessary property, requires the recipient to be a registrant if the supplier is, and puts the election on Form GST44 filed by the recipient’s first return deadline for the period in which tax would have become payable.
Three carve-outs survive the election, and the one that catches buyers is a taxable sale of real property where the recipient is not a registrant. Separately, HST does not apply to the portion of the price reasonably attributed to goodwill where the s. 167.1 conditions are met — CRA confirms that holds whether or not the s. 167 election is filed. That is your accountant’s and your lawyer’s file, not mine, but the HST clauses in the agreement have to allocate the risk explicitly.
Financing: goodwill has a hard sub-limit
If your lender is using the Canada Small Business Financing Program, the ceilings are published and they bite on a business like this one. Term loans go up to $1,000,000, of which a maximum of $500,000 is for purposes other than the purchase and improvement of real property the borrower owns or will own — and within that $500,000, a maximum of $150,000 can finance intangible assets and working capital costs. Goodwill is an intangible asset: the guidelines list “Goodwill if part of a going concern purchase.” A separate line of credit of up to $150,000 sits over and above the term-loan maximum.
Most cannabis stores are leased, so what you need financed is leasehold improvements, equipment, inventory and goodwill — all inside the $500,000 non-real-property band, with goodwill squeezed into the $150,000 sub-limit. The guidelines also say the agreement “should set out the allocation of the purchase price for each of the assets listed in the agreement.” Treat that as a drafting instruction. Eligibility is the lender’s and the program’s call, not mine.
The lease is the other half of the asset
The authorization is tied to the premises, so the lease is not a side document. It is half of what you are buying. Read the assignment clause first. Section 23(1) of the Commercial Tenancies Act deems a consent requirement to carry a proviso that consent “is not to be unreasonably withheld” — but only “unless the lease contains an express provision to the contrary,” and commercial leases frequently contain exactly that. Section 24 adds that a consent given “extends only to the permission actually given,” so a landlord’s consent to one assignment does not waive the covenant for the next.
Then read the use clause, the remaining term, the renewal rights, the exclusivity provisions and the demolition or relocation clauses. An authorization at an address you can be relocated out of is worth less than the same authorization on a long term with renewals. I read the lease before the offer goes out, and I would build a lease review condition into any cannabis store purchase. The clauses worth arguing about are the ones that decide whether you still have a store in five years.
What a cannabis store is worth
Neither the AGCO nor any other government source publishes sale prices or multiples for Ontario cannabis retail stores. I will not give you one. If a listing or a broker quotes you a multiple of earnings for a GTA store, understand that it is an opinion about their own inventory, not a published figure you can verify.
What you can verify is the lease, the location, the conditions on the authorization, the seller’s compliance record, and whether the store sits in a municipality that permits cannabis retail at all. Price it from those, and get a lawyer involved early — this is the kind of file they are for, because the closing mechanics on a Registrar-approved transfer are not a standard form.
Frequently asked questions
Can a cannabis Retail Store Authorization be transferred now?
Yes. O. Reg. 209/24 added s. 16.1 to O. Reg. 468/18, and the AGCO states that on 1 January 2025 the changes “came into effect to allow the transfer of a Retail Store Authorization (RSA).” The Registrar may transfer an authorization to a person who holds a retail operator licence. Before that change, s. 17(1) of the Cannabis Licence Act, 2018 made all three instruments non-transferable except as permitted by the regulations, and the regulations permitted nothing.
Do I need my own Retail Operator Licence first?
Yes. Section 16.1(1) allows a transfer only “to a person who holds a retail operator licence,” and the AGCO bulletin tells buyers they must hold one or must apply for one “before you can start the transfer application.” Nothing in s. 16.1 permits the transfer of an operator licence itself, and nothing permits the transfer of a Cannabis Retail Manager Licence. Plan your timeline around obtaining your own licence, which is the step you control least.
Does a transfer have to pass the school-distance and public-interest tests?
No, and this is the most valuable feature of the new route. Section 16.1(2) requires the transferee to be eligible under s. 4(6) of the Act “other than paragraphs 5 and 6” — the paragraphs carrying the public-interest test with its municipal and resident notice process and the 150-metre school separation. A new store application faces both. A transfer does not. That is a real part of what an established, authorized location is worth.
What can stop a transfer even if I qualify?
An outstanding monetary penalty against the seller. Section 16.1(2) requires that “no monetary penalties imposed under subsection 14(5) of the Alcohol and Gaming Commission of Ontario Act, 2019 are outstanding against the current holder of the authorization.” Exceeding the 150-authorization cap will also stop it. Both are diligence items you raise before you sign, with a vendor covenant that nothing is outstanding at closing.
How long does approval take?
I do not know, and neither does anyone quoting you a number. The AGCO publishes no service standard or timeline that I can find for a Retail Operator Licence application or for an RSA transfer approval. Do not borrow a timeline from another regulator. The practical answer is to make closing conditional on the Registrar’s approval, with a date tied to approval and an extension mechanism your lawyer drafts.
How many stores can one operator hold?
Section 12(1) of O. Reg. 468/18 requires the Registrar to refuse an authorization if the applicant, or the applicant and its affiliates between them, “already hold 150 authorizations.” Affiliates count with you, so a group structure does not create headroom. If you are acquiring near that ceiling, count the existing authorizations across the whole affiliated group before you make an offer.
Can a licensed producer own the store?
Only up to a point. Section 7 of O. Reg. 468/18 makes a corporation ineligible for a retail operator licence if more than 25 per cent of it is owned or controlled, directly or indirectly, by one or more licensed producers or their affiliates, or if the corporation itself directly or indirectly owns or controls more than 25 per cent of a licensed producer or its affiliates. The cap runs in both directions. Check the cap table arithmetic before you spend anything.
Do the seller’s conditions come with the authorization?
Yes. Section 17(4) of the Act provides that a transferred authorization “is subject to the same conditions to which it was subject immediately before the transfer.” So any condition the Registrar attached to that store stays attached after the transfer. Ask for the authorization document itself and read the conditions on its face, and ask for the compliance history behind them. You are inheriting a regulatory position, not a clean slate.
Sources
- Ontario e-Laws — Cannabis Licence Act, 2018, S.O. 2018, c. 12, Sched. 2
- Ontario e-Laws — O. Reg. 468/18 (General) under the Cannabis Licence Act, 2018
- AGCO — Information Bulletin: Transfers of Retail Store Authorizations
- AGCO — Apply for a Retail Store Authorization
- AGCO — Retail Store Pre-Authorization Inspection
- Canada Revenue Agency — GST/HST Memorandum 14-4, Sale of a Business or Part of a Business
- Innovation, Science and Economic Development Canada — Canada Small Business Financing Program Guidelines
- Ontario e-Laws — Commercial Tenancies Act, R.S.O. 1990, c. L.7
LOOKING AT A CANNABIS STORE IN THE GTA?
The transfer route is new enough that a lot of deals are still being papered as though it does not exist. Before you sign, the questions are: does the buyer hold an operator licence, what conditions sit on this authorization, is anything outstanding against the seller, and does the lease give you the term you are paying for. I will read the lease and walk the premises with you and tell you where the risk actually is.
Book a 15-minute call or call or text 833-330-1925.
I am a broker, not counsel and not the Registrar. I also will not tell you how long AGCO will take, because nobody has published it and guessing at it is how firm closings turn into lawsuits.
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Jatin Dua is Broker of Record and co-founder of RE/MAX Quantum Realty, Brokerage, Unit 101, 799 The Queensway, Etobicoke. Four-plus years in the GTA and more than $100M in sales volume. He works on commercial and business purchases across Toronto and the west GTA.
This is general professional commentary from a Broker of Record on commercial and business acquisitions in Ontario. It is not legal, tax or accounting advice, and it does not create any professional relationship. Whether a licence transfers, how a purchase should be structured, what tax applies and what a regulator will require on your particular file are questions for your lawyer, your accountant and the regulator itself. Rules, fees and published requirements change — verify anything you intend to rely on against the primary source on the day you rely on it.