Cannabis was legalized across Canada in 2018, to the excitement of many. Since then, the industry has grown steadily. Just this September, Ontario saw sales growth of 5.3 per cent from the previous month. So if you’ve been thinking of opening your own business, now might be the time to do so—but there are a few things you should know first.
If you’re ready to jump into the retail cannabis industry, here are some things to keep in mind…
1) You need to know the law
While cannabis is legal, there are still rules that business operators need to follow. That’s why it’s so important to know the federal and provincial laws, as well as any applicable municipal regulations. For example, in Ontario, no part of your cannabis business can be located outdoors. You’ll also need to ensure that you understand the requirements for getting a license. That includes everything from necessary documents to the security needed to cover one month of cannabis duty liability ($5000 at minimum).
2) Business planning is key
A cannabis business is like any other commercial enterprise, which means putting together a plan is crucial. That means laying out who you’ll serve, your unique advantage in the marketplace, who your management team will be, your marketing strategies, projected revenues and expenses, and more. You should have this crucial document prepared when you’re taking steps like applying for a loan, a license, and insurance. Having someone who’s experienced in the industry as your advisor can be very helpful at this stage.
3) Tackling the financials can be tricky
Not all banks will fund a cannabis business—although attitudes are certainly changing within the financial sector. BMO has been a well-known player since legalization, but you have other options. Along with the big banks, you can try alternative financing companies, credit unions, and private equity firms. Be aware that you may also have to do a little extra research to find the right place to open a bank account. The key is to do your homework, and make sure you have all necessary documents (including your business plan) in place!
4) You’ll need to market safely
You’ve probably noticed that Canadian cannabis companies use plain packaging. There’s good reason for that. Our government doesn’t look kindly on any form of advertising that could be perceived as promoting cannabis products to minors (so presenting them as part of a glamorous lifestyle is out). While you can still use social, online, and print marketing to your advantage, there’s a lot of grey area to watch for. To play it safe, check with a lawyer who knows cannabis law.
5) Location matters
The location of your storefront could make or break your venture. But before you start considering where your target demographic hangs out, knowing the laws and regulations is crucial. For example, in Ontario, you can’t set up shop within 150 metres of a school property line. That said, there’s more to choosing the right spot for your business than legalities. You’ll also want to consider factors such as foot traffic (though be aware that cannabis can’t be visible from the street). Getting in touch with an experienced commercial real estate agent is the first step!
ON THE HUNT FOR THE IDEAL SPACE FOR YOUR BUSINESS? REACH OUT TO LEARN HOW I CAN HELP YOU MAKE THE SMARTEST PURCHASE POSSIBLE!
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Hi i’m a licensed cannabis holder looking for a location in toronto to open up. Would really appreciate your help on finding a unit possibly close to a beer store or lcbo. Thanks