Leasing a Plaza Unit to a Vape Shop in Ontario: What a Specialty Vape Store Must Meet and What Your Lease Should Cover

Two vacant units in the same plaza can get two different answers. The regulation looks at the door customers use, whether the unit is a passageway, and whether anything inside can be seen from outside.

I’m Arthur Zhao, a Toronto real estate Broker. Picture a landlord with two vacant units in the same plaza. Unit A is the end cap: its own glass door opens straight onto the parking lot. Unit B sits in the middle of the building: customers reach it from an indoor hallway the tenants share, and its back door opens onto a service corridor that the neighbouring tenants walk through as a shortcut to the loading area. A prospective tenant wants to open a specialty vape store, and the landlord’s question is simple: which of the two units can actually work?

The answer sits in a handful of conditions in Ontario’s Smoke-Free Ontario Act regulation that are written about the space itself: the door, the passage, the glass. Below I run both units through those conditions, then look at what the store gains if it qualifies, and finish with the lease clauses that follow from all of it.

The unit test: four conditions written about the space

According to O. Reg. 268/18 (2023 consolidation), s. 22(2), a specialty vape store may display and promote vapour products only if the place of business meets these conditions:

1. It is a building, or inside a building. A plaza unit meets this.

2. Customers can enter only from the outdoors, or from areas of an enclosed shopping mall that are open to the public, “common to most of the retail establishments or other businesses within the mall,” and not part of any retail establishment or other business in the mall. Note the word only: the test is about every way a customer can get in, not just the front door.

3. The place of business must not be a thoroughfare. The regulation does not define the word.

4. The display or promotion must take place entirely inside the store and must not be visible from outside it at any time of day.

Alongside these, the retailer must not let anyone under 19 enter, other than the owner or occupier, their employees, or a support person accompanying a person with a disability who is at least 19. Anyone who appears to be under 25 is treated as under 19 unless the retailer has checked identification.

One precision matters here. In the regulation’s text, these conditions are attached to display, promotion and in-store sampling (s. 22(2) and s. 32(2)), not to the definition of a specialty vape store in s. 1(1). Whether a board of health looks at the unit layout when it registers a store is something I could not confirm from the regulation; ask the local public health unit before you sign. For a landlord, the practical point is the same: a vape store that cannot display its products is not the business the tenant is planning to run.

Unit A, the end cap with its own door

Inside a building: yes.

Entrance: customers come in from the parking lot, which is the outdoors. This holds as long as the exterior door is the only way customers get in. If Unit A also has a door into the shared indoor hallway, the question becomes whether that hallway is part of an enclosed shopping mall meeting the three conditions above. The regulation does not define an enclosed shopping mall, so a strip plaza’s hallway is a point to settle with the tenant’s lawyer, or the simpler answer is to keep that inner door closed to customers.

Thoroughfare: nobody passes through Unit A to reach somewhere else, so on these facts this condition looks satisfied.

Visibility: this is where Unit A gets harder, not easier. An end cap is valued for its glass: two storefronts, full height, facing the traffic. The regulation says displays must not be visible from outside at any time of day, which includes the evening hours when the store is lit and the parking lot is dark. The tenant has to plan the shelving and the glass together.

Unit B, the interior unit with a shortcut behind it

Inside a building: yes.

Entrance: customers arrive through the shared indoor hallway. If the property is an enclosed shopping mall and that hallway is open to the public, shared by the mall’s businesses and not part of any one business, the regulation’s wording covers it. If the building is not an enclosed mall, or the hallway belongs to another tenant’s premises, the condition is in doubt.

Thoroughfare: the back door is the real issue. If neighbouring tenants walk through Unit B’s space to reach the loading area, the unit is being used as a passage. The regulation does not define thoroughfare, so I won’t tell you exactly where the line sits; but a unit that other people cross to get somewhere else is the plain-language picture of the word. If you want Unit B for this use, the conditional answer is: close off the through-route so no one crosses the store, and make sure no customer can come in from the service corridor.

Visibility: Unit B has less glass facing outside, but the hallway frontage counts. Displays must not be visible from outside the place of business, and the hallway is outside the store.

So in this plaza, Unit A passes the entrance and thoroughfare tests as described and needs work on the glass; Unit B needs the shortcut removed and an answer on the hallway before it is a candidate at all.

What a qualifying store can do that other retailers cannot

Once the store meets the definition and the conditions above, four things open up under O. Reg. 268/18. These are the reasons a tenant will pay for the right unit.

1. Flavoured products, and nicotine above 20 mg/mL

Retail establishments in Ontario may not sell or offer to sell flavoured vapour products, except specialty vape stores and cannabis retail stores under the Cannabis Licence Act, 2018 (s. 5(3)). Separately, vapour products with a nicotine concentration greater than 20 mg/mL may be sold at retail only in specialty vape stores (s. 5(5)). Both rights depend on the store meeting the definition: the 85% sales test and registration.

2. Displaying and promoting products inside the store

A retailer that is not a specialty vape store may not display vapour products at all, and may promote them only through information documents and signs that meet the conditions in s. 22(3). A specialty vape store may display and promote, but only within the s. 22(2) conditions covered above, including the rule that nothing is visible from outside.

3. Customers sampling a product in the store

The Act’s general ban on using an electronic cigarette in enclosed public places and workplaces (s. 12(1)) has an exception for sampling in a specialty vape store that meets the same entrance, building, thoroughfare and under-19 conditions (s. 32(2)). No more than two people may sample at the same time, the device must be the person’s own or, if the store supplies it, used with a fresh one-time disposable mouthpiece, and it must not contain cannabis, tobacco or a controlled substance.

4. Testing and demonstrating devices

Staff may hold an activated electronic cigarette to test it or show a customer how it activates, provided no vapour is inhaled or exhaled and the store meets the same set of premises conditions (s. 32(1)).

Writing the lease, clause by clause

What follows is how I think about each clause, not wording to copy. The legal drafting belongs with a lawyer.

Permitted use

A general “retail” use leaves the question open. A use clause that names a specialty vape store as defined in O. Reg. 268/18 makes the intended use explicit and lets the other clauses refer back to it. Think also about what happens if that status ends: does the clause allow a fallback use, or does any other use need your consent? Separately, the municipality’s zoning by-law has its own say on retail uses; I have not checked any city’s treatment of vape stores, so confirm the zoning for your property on its own.

Compliance covenant

The obligations in the regulation sit with the retailer: the registration, the 85% sales test and the under-19 entry rule. According to the Smoke-Free Ontario Act, 2017 (2024 consolidation), s. 3(1), no person may sell or supply a vapour product to anyone under 19. A compliance covenant puts in writing that these are the tenant’s to meet at the tenant’s cost, and that the tenant will show you evidence of registration on request. The regulation does not require a landlord to register anything.

Storefront and signage

This is where the keypoint above becomes a clause. Name the approved window treatment, who installs and maintains it, and how it fits the plaza’s sign and storefront criteria. Address the hallway frontage as well as the exterior glass. If the plaza has rules about lit windows or open frontage, carve out what this use needs rather than leaving two conflicting obligations in the same lease. Whether a particular exterior sign counts as promotion of vapour products is a question for the tenant’s lawyer and the local public health unit; the regulation’s text on visibility is about display and promotion, and I won’t stretch it further than that.

If the store falls below the threshold

This follows straight from the definition: if the store’s vapour product share drops below 85%, or its registration lapses, it is not a specialty vape store. On the regulation’s text, it can then no longer sell flavoured products (other than tobacco, menthol or mint), sell products above 20 mg/mL, display products, or allow sampling. The lease should say what happens next: notice to you within a set time, whether the tenant may operate as an ordinary retailer, and whether a change in the store’s legal status is a change of use requiring consent.

Before you sign with a vape store tenant

Two lists: what to ask the tenant for, and what to put in the lease.