How To Open A Cannabis Store In Canada

How To Open A Cannabis Store In Canada

The cannabis industry is a burgeoning billion-dollar industry that is continuing to grow due to the legalization in Canada in 2018. Despite the fact that it is completely legal in Canada, beginning a cannabis store is not a simple task. Laws and regulations are always changing, and you’ll need to remain on top of them to avoid getting into trouble. However, if you’re willing to open a cannabis store in Canada, you could be well compensated.

Let us walk through the licenses and permissions needed, and other laws and regulations to follow to open a cannabis store in Canada.

Can I Open A Store In Canada Right Now?

Yes, you can open a cannabis store in Canada. But to do so you will need to do a lot of research. The retail side of cannabis licensing is handled by provinces and municipal governments, which have their own requirements. If you were to set up a store in Ontario, for example, the regulators and license would be different than if you wanted to open one in British Columbia.

How Much Can You Buy?

Individuals who have reached the legal age of possession in their province are permitted to possess the following items:

  1. Up to 30 grams of dried legal cannabis, or the following substitutes:
  • Fresh cannabis – 150 grams
  • Edible products – 450 grams
  • Cannabis in liquid form – 2,100 grams
  • Concentrates – 5 grams
  • Plant seeds – 30
  1. Transfer up to 30 grams with other eligible individuals.
  2. Buy cannabis (dry, fresh, oils) only from authorized provincial or territorial retailers.
  3. Eligible individuals can grow up to 4 plants per residence (not per person).
  4. Prepare cannabis products such as drinks or food items at home. Creating concentrated products using organic solvents at home is not permissible.

Current Cannabis Laws In Canada

Cannabis laws differ from province to province in Canada.

Under federal legislation:

  • Eligible individuals can possess up to 30 grams of legally-produced cannabis.
  • Adults can grow up to four cannabis plants per household.
  • The minimum age for purchase and use is 18, but provinces have the authority to raise the age limit.
  • The Federal government controls the licensed production of cannabis.
  • The provincial government controls the distribution and sale of cannabis.

How Much Cannabis Can An Adult In Canada Possess?

An individual who has attained the legal age of possession in their province can legally possess the following:

Up to 30 grams of dried legal cannabis, or the following substitutes:

  • Fresh cannabis – 150 grams
  • Edible products – 450 grams
  • Cannabis in liquid form – 2,100 grams
  • Concentrates – 5 grams
  • Plant seeds – 30

Tax Rates in Canada

Cannabis became legal for recreational consumption throughout Canada in 2018. Significant issues arose in terms of education, law enforcement, and the application of excise duties, the Goods and Services Tax/Harmonized Sales Tax (GST/HST), the Quebec Sales Tax (QST), and provincial sales taxes (PSTs).

Lawmakers and regulators did not want consumers to shift towards the illegal market if heavy taxes were implied on cannabis and its products. As a result, they decided that the total federal, provincial, and territorial cannabis-specific duties will not exceed the higher of CA$1/gram or 10% of a producer’s selling price levied at the manufacturing level and paid to the federal government.    

Current Cannabis Market in Canada

An analysis by New Frontier Data (an American cannabis research firm) has noted that the Canadian cannabis industry could be worth up to $9.2 billion by 2025.

Cannabis Store Start-Up Costs in Canada

The answer to this question depends on many factors, including location, premises size, goals, and objectives. But the approximate start-up cost could go up to $350,000.

Types of Cannabis Store Licenses in Canada

Following are the types of cannabis store licenses processed in Canada:

Retail Operator Licence

Create an iAGCO account and submit your application using the iAGCO portal to apply for a Retail Operator License. You must meet the following conditions to apply for a Retail Operator license:

  • Be at least 19 years of age.
  • Not have been charged with an offense under the Cannabis Act, or similar acts.
  • Not be associated or have any roles in any criminal organizations.
  • Do not make any false statements or provide false information on your application.
  • Must not have been faulted in filing tax returns in your province.
  • You should have filed all corporate tax returns if you possess a business number with CRA.
  • Must be financially responsible for your cannabis store.
  • You must operate your cannabis store in compliance with the law and with honesty, integrity, and in the public interest.
  • Ensure that you have not had a Retail store authorization revoked in the past.

Store Authorization

Apply for a store authorization license through the iAGCO portal. To apply for a store authorization, you must:

  • Possess a Retail Operator Licence
  • Your ROL must not have conditions that bar you from applying or receiving a store authorization.
  • Ensure that the store, its equipment, and its facilities are aligned with the Cannabis License Act in Canada.
  • Have sufficient control over the store, equipment, and facilities; and
  • Conditions similar to obtaining a ROL.

 Cannabis Retail Manager License

Except in the case where the holder of the Retail Operator License is a lone proprietor or is in a partnership with two or more individuals and will undertake the tasks of the retail store manager for that shop, every cannabis retail store must have a licensed retail manager.

To obtain a Cannabis Retail Manager License, the conditions are similar to when applying for ROL.

How to Get a License

To open a cannabis retail store in Canada, you will need:

  • To send a notice to the local government, local fire department, and local police force or Royal Canadian Mounted Police detachment in charge of policing the area.
  • Acquire a Retail Operator License (ROL)
  • Apply for a Store Authorization;
  • Obtain a Cannabis Retail Manager License (RML)
  • Enter into a supply purchase contract with the Ontario Cannabis Retail Store (OCS); and
  • Obtain a security clearance.

Requirements for Canada Store Licenses   

Here are some of the major requirements for obtaining a store license in Canada: 

  1. Get a Retail Operator License;
  2. Acquire a Store Authorization;
  3. Obtain a Cannabis Retail Manager License;
  4. Sign a supply purchase contract with the Ontario Cannabis Retail Store (OCS); and
  5. Obtain a security clearance.

What Else Do You Need to Open a Store In Canada?

Step 1

Understand Cannabis Laws In Canada

Cannabis laws in Canada differ from province to province. The federal government has reserved some rights such as deciding the amount of cannabis an individual can possess, the number of plants a household can grow, or cannabis taxation are among a few. So you may have to follow the laws and regulations approved by the local provincial government.

Step 2

Create A Business Plan

A road map will assist you in reaching your goal successfully. That is how business plans help cannabis businesses. They outline the milestones you must achieve in order to start a successful cannabis store. They’re also necessary for spotting and overcoming potential roadblocks. Financial aspects, marketing, operations, and sales are all components of a business plan that assist you to achieve your objectives. Include the following points to ensure you create a good business plan to stay ahead of your competitors:

Target Audience Analysis

You’ll need to examine the usual end customers in the market segments you’re targeting in your business plan. When analyzing customer behavior, there are numerous aspects to consider. Concentrate on the behavioral factors that will decide how feasible your product is to your target audiences.

Competition

Include a summary of the companies and their products and/or services with which you will be competing. Determine the market leader and the factors that contribute to its success. Make a point of highlighting the firm’s or its offerings that are distinct from yours.

If you don’t have any present competition, don’t discount this part. If there isn’t a product or service on the market that is identical to yours, look for companies that offer products or services that serve substantially the same function. You should also try to discover any companies that are planning to enter the market or are creating products or services that will be competitive with the ones you provide.

Financial Plan

The most crucial element of the business strategy is the financial plan. It should include all necessary financial records describing your company as well as financial estimates for future revenues and income. A financial plan should include the following:

  • Income statements
  • Cash flow projections
  • Balance sheet
  • Debt obligations
  • Break-even analysis

Operations & Logistics Plan

The workflows and processes you’ll use to bring your business plan to life are described in the Operations and Logistics section. Your operational goal takes into account a variety of aspects, including how each of your departments contributes to various operational goals. In the event of unforeseen occurrences, this section will also explain solid contingency preparations. Make it evident to the reader that you have a thorough understanding of your supply chain in this section.

Your operations and logistics analysis must include:

  • Description of your suppliers
  • Your production processes
  • Key metrics and milestones
  • Necessary equipment and tech details to keep your store running
  • Explain quality control measures

Writing a great business plan isn’t easy, but it’s critical to devote sufficient time and attention to the process. Many brilliant businesses fail to secure finance because their business plans are inadequate and they fail to express their company’s viability.

Step 3

Choose A Winning Team

The cannabis store team serves as the foundation of any new cannabis store. Therefore, it’s important for all cannabis store owners to understand how to build one with skill and discernment.

The cannabis store team serves as the foundation of any new cannabis store. Therefore, it’s important for all cannabis store owners to understand how to build one with skill and discernment.

A successful cannabis store startup team is made up of highly skilled individuals with a diverse set of skills and abilities.   You don’t have to like everyone, but because of the intense nature of a startup team, you will need to find people who are culturally compatible. It could be beneficial to put down exactly what kind of team you want. What kind of individual helps you maintain your equilibrium? It’s easier to find someone if you know who you’re looking for.

Step 4

Choose Your Location With Care

As a business owner, you should be aware that the location of your establishment might influence its success or failure.

Factors to consider when choosing a location:

  • Zoning: Ensure the area is zoned for your cannabis store. It should not be near schools, churches, and other areas that the municipal government has not approved.
  • Demographics: Assess whether the demographics of the local population are a good match for your upcoming store.
  • Accessible: Ensure that you are in a high-traffic area and that it is easily accessible.
  • Competition: Make certain that any nearby businesses are not in direct rivalry with yours.

Step 5

Tech Integration with Leading Technology Partner 

Do you want to set up your cannabis store and stay ahead of your competitors? Then it’s time to seriously consider integrating the best technologies and hardware by a renowned technology partner in your area. Stable tech integration is one of the key catalysts for business growth.

Cannabis stores with well-integrated technologies are able to do well in the long run. It enables them to thoroughly analyze the information and gain valuable insights to help to set up a modern cannabis store, maximize their people and technologies, and stay ahead of their competition.

How Can Cure8 Help?

Cure8 is the cannabis industry’s go-to IT partner. We provide a range of technical solutions to help cannabis businesses in Canada thrive and make more informed business decisions so that they are able to stay ahead in the evolving market.

From POS and surveillance systems to networks and back-office computers, Cure8’s services have guided dispensaries and retail stores, helping them transform and grow their businesses with the support of our leading technical expertise.

To know more about our services, click here.

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