There is no hiding it. Part of the appeal of the legal cannabis industry in Canada is a monetary one. Sure, many people have decided to open a cannabis store because of their love of the plant. But this is also the Golden Age of cannabis, and there is money to be made.
With an industry currently valued at $12 million, there is no wonder why you are interested in getting involved. And surely one of the questions at the top of your mind is, “How much does a Canadian dispensary owner make?”
We can find few publicly available numbers. But we take a stab at working out an average dispensary profit margin and the subsequent owner’s salary.
How Much Does a Canadian Dispensary Make?
How much you make as a cannabis retail owner directly relates to how much your store makes. Your business’s profitability is influenced by its location, competition, and tax rates.
To understand the profits of a Canadian cannabis store, let’s look at the profit margins for US dispensaries. As reported in MJBizFactbook 2022, 57 percent of standalone retailers were profitable in 2021. Vertically integrated operations were 65 percent were profitable.
Fortune reports that in the US industry, cannabis CEOs make between $229,000 to $471,600 US annually, with the median salary at $350,300 US. Of course, keep in mind this includes statistics from massive multistate operators (MSOs), but it’s a good temperature check for high-level positions across the sector
In terms of retail more specifically, Fortune found that the vice president of retail for an MSO made between $162,000 to $252,000 US. Non-MSO director of retail typically pulled in $116,000 to $161,400 US. These are numbers from 2021.
But what about Canada? Thrive, a liquor and cannabis consultant, estimated monthly revenues for retailers in a handful of provinces. While the numbers are a few years out of date (2019), they do suggest potential solid profit margins for the average store:
- Ontario: $1,077,291
- Manitoba: $227,478
- Alberta: $165,360
Annually, that revenue works out to $1,984,320 to $12,927,492 Canadian. While operational expenses and taxes eat up a majority of that profit margin, it still leaves a sizable chunk left over for owners and investors.
How Much Does a Canadian Dispensary Owner Make?
If you plan to open a new cannabis store in Canada, how much can you expect to make annually? Realistically, this is a difficult question to answer. Most stores in Canada are privately owned, which means they do not release their financial statements
With a bit of online digging, you may see several prominent sources reporting dispensary owners make between $250,000 to $500,000 annually. These are uncited but likely realistic. That’s because, if your business is one of the profitable ones, you are likely making over a million dollars a year in gross revenue.
If we crunch the numbers on operational expenses, it’s possible that you’ll be pulling in several hundred thousand of that revenue in salary as an owner.
Of course, that’s a rough estimate. In Canada, there are a lot of markets with a lot of different variables to consider. Where you operate, the local competition and intra-provincial nuances will all impact gross revenue potential — which in turn impact your salary
3 Major Cost Considerations for a Canadian Dispensary
Staff
By far, the most expensive line item on your budget is labour. According to Glassdoor, the average budtender makes around $36,800 annually or between $16 to $19 an hour. That’s based on information tallied from some of Canada’s largest retailers, including Tokyo Smoke, Canopy Growth, Fire & Flower, and the Hunny Pot.
If your location is large enough to have a manager, you’ll need to spend another $60,000 or more per position.
How much you decide to work in front of the house (and how you are compensated for it) will also significantly increase or reduce your labour costs.
Taxes
Perhaps not a surprise, but taxes consume a lot of your profits in the cannabis industry. In BC, Ontario, and elsewhere, retailers are letting it be known that excessive taxation is killing their profitability.
According to a recent CBC story, one retailer estimates that 44 cents of every dollar spent at a legal cannabis store go towards provincial and federal taxes. But that still leaves 57 cents to the store.
As the old saying goes, “Nothing is certain but death and taxes.” This certainly holds true in the cannabis sector.
Upcoming Changes to the Cannabis Act
Related to the ongoing frustrations with taxes is the upcoming Cannabis Act review. The federal government just launched it this past September (2023).
In the review, the government will explore the health and safety impacts of the legal cannabis industry — but also the success of the market overall.
With feedback collected from industry stakeholders, including cannabis retailers, there is a chance that the government will adjust taxes and the overly restrictive supply chain. Business owners from coast to coast have already loudly voiced these concerns.
The hope is that the review will tweak tax and supply legislation, to help business owners increase profit margins.
Are You Ready to Open a Cannabis Store?
No that you know how much a Canadian dispensary owner makes, are you ready to take the plunge? We are an all-in-one ecosystem of services, including POS technology, digital signage, and eCommerce integrations. Partner with us to easily manage your business all within one core system. Our fully integrated product line makes running your store simple and profitable. Let us help.
