Cannabis Store Premises Rules in Ontario and the GTA Opt-Outs

Last updated 12 September 2026. Written by Jatin Dua, Broker of Record at RE/MAX Quantum Realty, 799 The Queensway, Etobicoke · Commercial & business purchases · 15 min read

Start with the map, because the map can end the conversation

Ontario let municipalities opt out of cannabis retail. Some of the wealthiest and busiest municipalities in the Greater Toronto Area did. If you are looking at a unit in one of them, nothing else in this article matters.

The AGCO publishes the list. On that list, the following GTA municipalities have opted in: Toronto, Mississauga, Brampton, Milton, Burlington, Ajax, Pickering, Oshawa and Aurora. The following have opted out, with the dates the AGCO records against them: Markham (12/12/2018), Vaughan (01/21/2019), Richmond Hill (01/08/2019), Oakville (01/14/2019), Whitby (01/21/2019), Newmarket (01/15/2019), Caledon (01/22/2019) and King Township (12/10/2018).

Opted in (per the AGCO list)	Opted out (per the AGCO list, with AGCO-recorded date)
Toronto	Markham — 12/12/2018
Mississauga	Vaughan — 01/21/2019
Brampton	Richmond Hill — 01/08/2019
Milton	Oakville — 01/14/2019
Burlington	Whitby — 01/21/2019
Ajax	Newmarket — 01/15/2019
Pickering	Caledon — 01/22/2019
Oshawa	King Township — 12/10/2018
Aurora	—

That table is the position on the AGCO list, and the list is live. Re-check it yourself before you sign anything. I am telling you what the AGCO published, not what is true on the day you read this.

The opt-out ratchet only turns one way

This is the part that matters for anyone taking a long-term view of a market like Vaughan or Markham. The AGCO states that municipalities had until 22 January 2019 to inform it if they wished to opt out, and that “Municipalities that chose to opt out can opt back in at any time—but once they are in, they may no longer opt out.”

Read that carefully, because it cuts both ways. An opted-out municipality can reverse itself at any time, so today’s closed market can open. An opted-in municipality cannot close. If you hold an authorization in Toronto or Mississauga or Brampton, no future council can opt the municipality out from under you. That is a real piece of security in an existing store’s value, and nobody mentions it when quoting you a price.

The walls rule is more prescriptive than buyers expect

Section 9(1) of O. Reg. 468/18 tells the Registrar not to issue an authorization if the premises fails a physical test. There are three limbs and each one kills certain units outright.

Limb one: the retail space where cannabis would be sold must be enclosed by walls separating it “from any other commercial establishment or activity and from any outdoor area.” Not partitioned. Enclosed by walls. A store-within-a-store, a kiosk, a section of a larger shop, an open frontage onto a patio — none of those work.

Limb two: the retail space must not be capable of being “entered from or passed through in order to access any other commercial establishment or activity, other than a common area of an enclosed shopping mall.” So a unit you walk through to get to the nail salon behind it fails. The only permitted pass-through is a common area of an enclosed shopping mall. That single carve-out is why mall locations work at all.

Limb three, and the one missed most often: the premises where cannabis is received or stored must not be “accessible to any other commercial establishment or activity or to the public.” Your back room has to be a controlled space. A shared receiving corridor down the back of a plaza, a common loading bay, a storage room the landlord can access, a mezzanine the neighbouring tenant’s staff walk through — all problems.

Two carve-outs soften this. Section 9(2) deals with automated teller machines. Section 9(3) permits certain employee-only shared spaces where entryways “are secured to prevent unauthorized entry.” Both are narrow.

Meeting it once is not enough

Section 9(4) is one sentence and it changes how you should think about the premises: “It is a condition of a retail store authorization that the cannabis retail store continues to meet the requirements set out in this section.”

So the walls, the pass-through rule and the secure receiving area are continuing obligations. If the landlord later reconfigures the plaza and puts a door between your back room and a shared corridor, you have a compliance problem attached to your authorization, not a maintenance annoyance. That has a drafting consequence in the lease: you need the landlord’s alterations, access and relocation rights read against s. 9, and you need your own right to maintain the separation. The clauses that govern landlord access and alterations are the ones that decide whether s. 9(4) is ever a problem for you.

Separately, paragraph 7 of s. 4(6) of the Cannabis Licence Act, 2018 makes an applicant ineligible where the premises, equipment and facilities are not in compliance with the Act, the regulations or the Registrar’s standards, or where the Registrar is satisfied that the applicant “will not exercise sufficient control, either directly or indirectly, over the premises, equipment and facilities.” Control over the premises is itself an eligibility question. A lease that hands the landlord broad rights over your space is not a neutral document in that assessment.

The Registrar’s Standards: cameras, storage, access, display

The AGCO’s Registrar’s Standards for Cannabis Retail Stores set out the physical store requirements, and they are specific enough to cost real money in a fit-out.

Cameras and lighting “must be positioned to clearly capture 24 hour coverage of the interior of the premises and immediately outside the premises,” covering entrances and exits, pick-up areas, the point of sale, receiving areas, sales floors and cannabis storage areas. Video recordings “must be made and retained for a minimum of 30 days and be made available to the AGCO upon request.”

All cannabis “must be stored securely at all times and be accessible only by staff from receipt of product to point-of-sale, destruction, or return.” All points of access to the premises “must be secure and protected against unauthorized access.” And display containers must be “locked and tamper-proof to prevent patrons from touching the cannabis.”

Requirement	What it means on the floor plan
Enclosure by walls (O. Reg. 468/18, s. 9(1)(a)(i))	Full demising walls separating the retail space from any other commercial establishment or activity and from any outdoor area
No pass-through (s. 9(1)(a)(ii))	No route through your store to another commercial establishment, except a common area of an enclosed shopping mall
Receiving and storage (s. 9(1)(b))	Not accessible to any other commercial establishment or activity, or to the public — so no shared loading or storage
Continuing compliance (s. 9(4))	A condition of the authorization, so a later landlord reconfiguration can create a compliance problem
Camera coverage (Registrar’s Standards)	24-hour coverage of the interior and immediately outside, including entrances, exits, pick-up, point of sale, receiving, sales floor and storage; 30-day retention
Secure storage and access (Registrar’s Standards)	Cannabis accessible only by staff from receipt to point of sale, destruction or return; all points of access secured
Display (Registrar’s Standards)	Display containers locked and tamper-proof so patrons cannot touch the cannabis
Hours (O. Reg. 468/18, s. 17, as amended by O. Reg. 125/26)	Between 7 a.m. and 11 p.m. on any day

An inspector sees the store before a customer does

The AGCO states that “Prior to a CRSA being issued and a cannabis retail store opening for business, the store location will be inspected by an AGCO Inspector.” That is not a post-opening audit. It is a gate.

For a buyer that has two consequences. On a transfer of an existing authorization, ask for the inspection history and the authorization document with its conditions on the face. On a new fit-out, the inspection sits at the end of construction and in front of your first dollar of revenue — every delay in the fit-out is a delay in opening, and the rent has already started. Records must also be “maintained, retained a minimum of three (3) years,” which is a systems question to ask before closing rather than after.

The 150 metres, and the two ways it is measured

A proposed cannabis retail store may not be located less than 150 metres from a school or a private school. The statutory hook is s. 4(12)(a) of the Act, and the measurement rules are in s. 11(2) of O. Reg. 468/18. There are two of them, and which one applies depends on the building.

If the school or private school “is the primary or only occupant of a building, 150 metres shall be measured from the property line of the property on which the school or private school is located.” If the school “is not the primary or only occupant of a building, 150 meters shall be measured from the boundary of any space occupied by the school or private school within the building.”

That distinction is worth money in a dense GTA context. A private school occupying two floors of an office tower is measured from the boundary of its own space inside the building, not from the tower’s property line. Section 11(3) excludes private schools on a reserve and those offering classes only over the Internet.

One important interaction with the business side of the deal: this test is excluded on a transfer of an existing Retail Store Authorization. Section 16.1(2) of O. Reg. 468/18 requires a transferee to be eligible under s. 4(6) “other than paragraphs 5 and 6” — the public-interest and school-distance paragraphs. So an established, authorized store does not have its distance from a school re-measured when it changes hands. A new store at the unit next door would be measured.

Zoning, permits and the City of Toronto

Toronto does not have a municipal cannabis retail licence. The City’s own position is that “Cannabis can only be sold by stores that are licensed by the Alcohol and Gaming Commission of Ontario (AGCO),” and the only separation rule the City cites is the provincial one: “In Ontario, cannabis stores must be at least 150 metres away from public and private schools.”

There is also no cannabis-specific use in Zoning By-law 569-2013. A cannabis store falls under the general definition of a retail store — “premises in which goods or commodities are sold, rented or leased.” That is helpful, but it is not a substitute for a review. Some properties in Toronto remain subject to former municipal by-laws, and some provisions of 569-2013 are under appeal and not in full force and effect. Get a written City review and put a zoning condition in the offer.

The permit question is separate and often forgotten. Under s. 10(1) of the Building Code Act, 1992, no person shall change the use of a building or part of a building where the change would result in an increase in hazard as determined in accordance with the building code, unless a permit has been issued by the chief building official. The City of Toronto states the requirement more broadly: “Even if no construction is proposed, if a change of use is proposed a building permit is required,” and “Even if a building permit is not required, compliance with the Zoning Bylaw is required.” Treat the City’s formulation as the operating rule inside Toronto and confirm it with the chief building official. Sections 8(2)(a) and 10(2)(a) also tell the chief building official to refuse a permit where the work or use would contravene “any other applicable law” — the hook that makes zoning compliance a permit condition.

Accessibility, and the counter you are about to replace

The Design of Public Spaces requirements in the Integrated Accessibility Standards Regulation apply to public spaces “newly constructed or redeveloped,” where “redeveloped” means “planned significant alterations to public spaces, but does not include maintenance activities, environmental mitigation or environmental restoration.”

One provision is worth flagging for a cannabis fit-out. Section 80.41 is triggered “When constructing new service counters, which includes replacing existing service counters.” A cannabis store is a counter business. If your fit-out replaces the existing counters, you are constructing new ones for the purposes of that section: where there are multiple queuing lines and counters, at least one counter must accommodate a mobility aid for each type of service provided and be clearly identified with signage; where a single queuing line serves one or more counters, each counter must accommodate a mobility aid. The regulation also covers accessible off-street parking and exterior paths of travel.

Interior barrier-free requirements sit in the Building Code rather than the IASR, so that is a question for your designer and the chief building official. And if the business ends up with twenty or more employees, the next accessibility compliance report deadline is 31 December 2026.

How I look at a cannabis unit

Municipality first, on the AGCO’s current list. Then the floor plan against s. 9 — walls, pass-through, receiving and storage. Then the school distances, with both measurement rules in mind and the building’s occupancy checked. Then the lease: landlord alterations, access, relocation, term, renewals, and whether the tenant has the control over the premises that para. 7 of s. 4(6) expects. Then the fit-out: cameras, secure storage, display, and the sequencing through the building permit and the pre-authorization inspection.

None of that is a valuation exercise, deliberately. No government source publishes sale prices or multiples for Ontario cannabis retail, and I will not quote one. What I can tell you is whether the box you are looking at can lawfully be the store you have in mind.

Frequently asked questions

Which GTA municipalities do not allow cannabis stores?

On the AGCO’s published list, Markham, Vaughan, Richmond Hill, Oakville, Whitby, Newmarket, Caledon and King Township are recorded as having opted out. Toronto, Mississauga, Brampton, Milton, Burlington, Ajax, Pickering, Oshawa and Aurora are recorded as opted in. The list is maintained by the AGCO and changes, so treat this as the position on the list rather than the position today, and re-check it before you commit to a unit or a lease.

Can a municipality that opted out change its mind?

Yes. The AGCO states that municipalities had until 22 January 2019 to inform it if they wished to opt out, and that municipalities which chose to opt out “can opt back in at any time—but once they are in, they may no longer opt out.” So a closed market can open, and an open market cannot close. That one-way ratchet is a real piece of security in an existing store’s value in an opted-in municipality.

Can I open a cannabis store inside a larger shop or as a kiosk?

No. Section 9(1)(a)(i) of O. Reg. 468/18 requires the retail space to be enclosed by walls separating it from any other commercial establishment or activity and from any outdoor area, and s. 9(1)(a)(ii) prohibits a space that could be entered from or passed through to access another commercial establishment, other than a common area of an enclosed shopping mall. A kiosk or a store-within-a-store does not satisfy that.

Does the stockroom really need to be separate?

Yes. Section 9(1)(b) says an authorization may not be issued where the premises at which the cannabis would be received or stored “would be accessible to any other commercial establishment or activity or to the public.” Shared loading bays, shared back corridors and landlord-accessible storage are all problems. Section 9(3) permits certain employee-only shared spaces where entryways are secured to prevent unauthorized entry, but it is narrow — get advice before relying on it.

What camera coverage does the AGCO require?

The Registrar’s Standards require cameras and lighting positioned to clearly capture 24-hour coverage of the interior of the premises and immediately outside it, covering entrances and exits, pick-up areas, the point of sale, receiving areas, sales floors and cannabis storage areas. Recordings must be made and retained for a minimum of 30 days and made available to the AGCO on request. Price the system and the storage into your fit-out budget, not into your operating budget.

How is the 150 metres from a school measured?

Two ways, under s. 11(2) of O. Reg. 468/18. If the school or private school is the primary or only occupant of a building, the 150 metres is measured from the property line of the property the school is on. If the school is not the primary or only occupant, it is measured from the boundary of the space the school occupies within the building. Section 11(3) excludes private schools on a reserve and those offering classes only over the Internet.

What hours can a cannabis store open?

Between 7 a.m. and 11 p.m. on any day, under s. 17 of O. Reg. 468/18 as amended by O. Reg. 125/26. Check that against the lease before you sign, because plaza and mall leases often set their own permitted or required operating hours, and a landlord’s mandatory-opening clause that conflicts with the regulation is something to resolve in the lease rather than in practice.

Is there an inspection before the store can open?

Yes. The AGCO states that prior to a store authorization being issued and the store opening for business, the location will be inspected by an AGCO inspector. It sits at the end of the fit-out and in front of your first day of revenue, which means construction delays are revenue delays while rent runs. Records must be maintained and retained for a minimum of three years, so ask about record-keeping systems during diligence.

Sources

• Ontario e-Laws — O. Reg. 468/18 (General) under the Cannabis Licence Act, 2018
• Ontario e-Laws — Cannabis Licence Act, 2018, S.O. 2018, c. 12, Sched. 2
• AGCO — Registrar’s Standards for Cannabis Retail Stores, Physical Store Requirements
• AGCO — Retail Store Pre-Authorization Inspection
• AGCO — List of Ontario municipalities prohibiting or allowing cannabis retail stores
• City of Toronto — Cannabis
• Ontario e-Laws — Building Code Act, 1992, S.O. 1992, c. 23
• Ontario e-Laws — Integrated Accessibility Standards Regulation, O. Reg. 191/11

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.