Despite being the most populous province in all of Canada, Ontario currently has one of the smallest cannabis retail footprints in the nation. But that could soon change following the Government of Ontario’s announcement that it will abandon the current lottery system in favor of an open market for private cannabis retail beginning January 6, 2020.
The amendments to Ontario Regulation 468/18 will result in a new application process, which will continue to be administered by the Alcohol and Gaming Commission of Ontario (AGCO). The new rules will also eliminate the cap previously placed on private cannabis retail licenses as of March 2, 2020. After that date, AGCO anticipates issuing up to 20 new licenses per month. Keep reading to find out what this change means for cannabis retail entrepreneurs.
How to Apply for a Cannabis Retail Operator License in Ontario
Moving forward, Ontario will be implementing a two-step application process for cannabis retail licensing.
Step One: Apply for a Retail Operator License
The first step is to apply for a Retail Operator License. In order to qualify, applicants must meet certain criteria, including:
- Must be 19 years of age or older
- Must not have been convicted or charged with any offenses under the Cannabis License Act or certain offenses under the Cannabis Control Act and Cannabis Act
- Must not be in default of filing a tax return or have any outstanding or past due tax
You can find the full list of criteria for obtaining a Retail Operator License here.
NOTE: Beginning January 6, 2020, any qualified candidate may apply for a Retail Operator License. However, until March 2, only those who were already selected and notified by the Registrar before January 6 may move on to the second step of applying for a Retail Store Authorization.
Step Two: Apply for a Retail Store Authorization
Beginning March 2, 2020, all candidates who have successfully applied for a Retail Operator License will be able to move forward with step two of the licensing process: applying for a Retail Store Authorization.
Naturally, there are certain criteria that your proposed store must meet in order to be eligible for authorization. For instance, cannabis retailers are not allowed in certain Ontario municipalities; you can find a list of them here. Your proposed location must also be at least 150 meters away from any school. Additional cannabis retail store requirements can be found here.
How to Open a Cannabis Retail Store in Ontario
Of course, obtaining your operator's license and store authorization is just one part of the equation when it comes to opening a cannabis retail store. Just like any other business, this venture will require plenty of planning and preparation.
Below are four critical tips to help you as you start down the path of opening your own cannabis retail store in Ontario.
1. Create a Comprehensive Business Plan
The first step in launching any business is drafting a business plan, and cannabis is no different. This critical document will not only help guide you in your journey, but will help you secure financing and demonstrate to authorities that your operation will satisfy legal requirements.
The seven main areas your business plan should address are:
- Location
- Use of funds
- Financing
- Personnel
- Sales/Marketing
- Operations and Compliance
- Security
- Determine Your Differentiation
One of the major points highlighted by Steven Fry and Darryl Allen — owners of one of Canada’s highest performing cannabis stores to date — in their Business of Cannabis podcast is determining what differentiates your dispensary from the rest of the market. As they put it, do you want to be Starbucks or Tim Hortons?
Conducting market research and crafting buyer personas will greatly help you in this task. Look around at the other cannabis stores competing in your market; what is their angle? Who are they targeting with their branding, marketing and in-store experience? With a clear understanding of what’s already out there, you’ll be better positioned to determine what the market needs — and then provide it.
2. Secure Financing
Another major aspect of launching a new business is securing the necessary funding. Unlike the States, cannabis business owners in Canada should have no problems securing financing through traditional avenues. These can include:
- Business loans
- Investment groups
- Capital brokers
Of course, friends, family, and business partners are all potentially viable sources of funding, and self-funding is an option as well.
3. Assemble Your Dream Team
When it comes to the personnel you’ll need to help open and run a successful cannabis retail operation, they can be broken down into two main categories: professional services and day-to-day staff.
On the professional services side, consider retaining the services of an attorney (preferably one with some degree of experience in the cannabis industry), a CPA, and a security consultant. Additionally, you’ll want to consult with an experienced compliance officer; in the long-run, though, this position should be on your list of full-time staff.
With regard to day-to-day staff, you’ll need managers, security officers, and front-line service providers. Another key tip from Steven and Darryl is to ensure both quality and quantity of staff. Quality-wise, look for candidates who are both passionate about cannabis and constantly seeking knowledge of the industry and product; on the quantity side, make sure you have enough personnel to support your operations — which be more hectic than you anticipate.
Learn More about Launching a Cannabis Retail in Ontario
For a more detailed look at everything involved in opening a cannabis retail store in Canada, check out our comprehensive ebook — just tap the button below to grab your free copy today!
