How to buy a pharmacy in Alberta: licences, ownership rules and what transfers

Anyone planning to buy a pharmacy in Alberta meets two separate roles that the Pharmacy and Drug Act, RSA 2000, c P-13 keeps apart: the licensee and the proprietor. The Alberta College of Pharmacy, through its registrar, administers the licence register under that Act. A buyer who has agreed on the business but not worked out who will hold the licence, and who will count as proprietor, can find that the licence has ended on the day the sale closes. This guide covers what the Act and the College say about who may apply, who may own, what ends a licence on a sale, and what to ask the seller.

Who may hold the licence

Under the Act, only a clinical pharmacist may apply for a pharmacy licence, and the Act calls a clinical pharmacist who holds a licence the licensee. The Alberta College of Pharmacy describes the licensee as the person who personally manages, controls and supervises the operation and practice of the pharmacy in line with the Act, the Code of Ethics and the Standards for the Operation of Licensed Pharmacies. A buyer who is not a pharmacist therefore cannot hold the licence. That buyer needs a clinical pharmacist willing to take on the licensee role, and that person’s obligations should be settled before closing, not after.

Who counts as the proprietor

The Act defines a proprietor as a person who owns, manages or directs the operation of a facility in which a licensed pharmacy is located and exercises a significant degree of control over the matters the definition lists: the management and policies of the licensed pharmacy, and the conduct of the regulated members employed by it. The Alberta College of Pharmacy says the proprietor does not have to be a pharmacist, but must complete its Proprietor Education Program, which teaches the rules for owning a pharmacy. If you intend to be the proprietor, ask the College when that program must be finished relative to closing, and keep the answer in writing.

What ends the licence when ownership changes

Section 14 of the Act lists when a licence terminates. Two items matter on a sale. A licence terminates if the proprietor designated on the licence changes. It also terminates, subject to section 14(1.2), if there is a change in a major shareholder of a proprietor that is a corporation. The Act defines major shareholder in its definitions section, so read that definition rather than relying on a summary. Under section 14(1.2), the shareholder-change termination does not apply if the licensee gave the registrar advance notice in accordance with the regulations and the registrar approved the change after being satisfied that the licensee and proprietor will comply with the Act.

Share purchase or asset purchase

Your deal structure decides which paragraph of section 14 you are working with. If you buy the pharmacy’s assets and become the new proprietor, the question is whether the proprietor designated on the licence changes. If you buy the shares of a corporate proprietor, the proprietor may stay the same while a major shareholder changes. Section 14(1.2), as written, refers only to the shareholder-change paragraph; it does not name the change of proprietor. Do not assume the advance-notice route covers an asset sale. Put the question to your lawyer and to the College before you sign.

A change of licensee is separate

Under section 14(1)(b), a licence also terminates if the licensee ceases to be responsible for the management, control or supervision of a licensed pharmacy. That means the seller’s pharmacist leaving can end the licence on its own terms, apart from any ownership change. Section 14(2) sets out one route through: despite subsection (1), if the proprietor or the proprietor’s agent immediately places the pharmacy under the personal management, control and supervision of another clinical pharmacist, the registrar may grant the proprietor permission to continue operating the pharmacy for the period prescribed in the bylaws, and may impose conditions on that permission. Ask who the current licensee is, whether that person intends to stay, and what the seller has agreed with them. If the licensee will not continue, ask the College how a replacement licensee should be put in place before the closing date.

Federal rules that sit alongside

If the pharmacy handles controlled substances, federal law also applies. Health Canada explains that class exemptions under the federal Controlled Drugs and Substances Act could apply to people in a geographic area, such as a provincial class exemption, or to a profession, such as pharmacists. That is federal and separate from the Alberta ownership rules above. Ask your lawyer which federal permissions the pharmacy relies on and whether any attach to the pharmacists rather than the business.

What to ask the seller for

• The current pharmacy licence and the register entry showing the licensee, the proprietor and the licensed location.
• The name of the licensee and written confirmation of whether that person will stay after closing.
• For a corporate proprietor, the shareholder register, so you can see which shareholders the section 14 shareholder rule would reach.
• Any advance notice already given to the registrar and any registrar approval or correspondence about past changes.
• Evidence that the proposed proprietor has completed, or can complete, the Proprietor Education Program.

More on the general process is in our guide to buying a pharmacy in Canada, and the pharmacies for sale page lists current listings. For wider permit questions on an Alberta sale, see licences and permits in an Alberta business sale.