The Ontario government says it plans to give the province’s cannabis regulator new powers to inspect, seize products from and fine illegal cannabis retailers, including online sellers. The proposal was announced on October 19, 2026, but it has not yet been introduced as legislation.
The Alcohol and Gaming Commission of Ontario (AGCO) licenses and oversees the province’s roughly 1,800 authorized cannabis retailers. Under the plan, it would also gain tools aimed at unauthorized storefronts and unlawful online operations.
What Ontario Is Proposing
According to the Ontario Newsroom release issued by the Attorney General’s office, the proposed changes would be part of an “upcoming package of legislative changes.” They would give the AGCO authority to:
- Conduct inspections of suspected illegal cannabis operations.
- Seize illegal cannabis products and equipment.
- Issue administrative monetary penalties.
The release says the powers would apply to both unauthorized storefronts and unlawful online retail. It does not name a bill, give penalty amounts, or set an introduction date.
The 30 Percent Figure
The government’s release states that illegal retailers account for approximately 30 per cent of cannabis sales in Ontario. It does not explain how that estimate was calculated. Some news coverage has described the figure in different terms, so readers should treat it as a government estimate rather than an audited measurement.
Attorney General Doug Downey said illegal retailers “undermine the businesses that play by them.” The province also argues that products sold outside the regulated system may not meet the same quality-control and testing requirements, and that illegal operations can generate proceeds that support criminal activity. Those are the government’s claims, and the release does not cite supporting data for them.
Why Enforcement Has Been Hard
Illegal storefronts have been a persistent complaint from licensed retailers since Canada legalized recreational cannabis in 2018. CP24 reported that Toronto bylaw officers stopped shutting down illicit dispensaries in January 2025, citing funding and safety concerns, and that the province committed $31 million over three years in 2024 to an Ontario Provincial Police-led enforcement team.
The proposal would put a new enforcement responsibility directly with the AGCO. AGCO Registrar and CEO Dr. Karin Schnarr said the role builds on the commission’s existing work and that the AGCO looks forward to working with law enforcement partners.
How Licensed Retailers Are Reacting
Licensed operators welcomed the direction but want details. CP24 quoted Paul Macchiusi, owner of Minerva Cannabis in Toronto, as saying he is glad to see a move from reactive to proactive enforcement, while cautioning that “it’s an announcement” and not enforcement, with no budget or timeline attached.
Cannabis lawyer Harrison Jordan told CP24 that the AGCO has historically lacked the mandate to pursue illegal stores. He also pointed to the cost of going legal, including government application fees of more than $10,000. The Retail Cannabis Council of Ontario, which represents licensed independent retailers, said the real measure of success will be enforcement that results in illegal stores closing.
What Is Still Unclear
- Legislation: The measures have been announced as an intention. Until a bill is introduced and passed, the AGCO does not have these powers.
- Penalty size: No monetary penalty amounts have been published.
- Funding and staffing: The release does not say how the AGCO would pay for inspections and seizures.
- Timing: No date has been given for introduction or for when the powers would take effect.
What It Means for Consumers
In Ontario, adults can legally buy cannabis from AGCO-authorized retail stores and from the province’s online retailer. Products sold through the legal system must be approved by Health Canada, while unlicensed sellers face no such requirement. For background on how legal purchasing works in Canada, see our guides on buying weed in Canada and legally ordering marijuana in Canada.
What Happens Next
The next milestone to watch is the introduction of the legislative package the province referred to. When it appears, the bill text should show the penalty structure, any appeal process, and how the AGCO’s new authority interacts with police and municipal enforcement. Ganjly will cover those details once they are public.
Sources
- Ontario Newsroom: Ontario Strengthening Enforcement Against Illegal Cannabis Retail Operations (October 19, 2026)
- CP24: Ontario is proposing a crackdown on illegal cannabis stores (November 1, 2026)
- The Marijuana Herald: Ontario Proposes Major Crackdown on Illegal Marijuana Retailers (October 2026)
