Ontario had a relatively slow start following the passage of the Cannabis Act in 2018. The province took its time launching provincial cannabis sales and even longer to open up private cannabis store licensing. Yet, today, there are more than 1,500 pot shops in Ontario, and business is booming. With these numbers, maybe you are also considering whether you want to open a dispensary in Ontario.
But the road to a legal cannabis retail store in the province is complication. Are you unsure where to start? Good news! You can start here.
The process is slightly different than in other provinces, but the fundamentals are the same: licensing, location, and developing intelligent daily operations systems.
Cannabis Store Licensing and Authorizations in Ontario
Compared with the typical licensing and permitting requirements in British Columbia and Alberta, the Ontario regulations add a secondary layer of authorizations.
Individuals who plan to operate a cannabis store must apply for a Retail Operator Licence and then apply for a Retail Store Authorization per each location.
Retail Operator Licence
The Alcohol and Gaming Commission of Ontario (AGCO) is responsible for issuing operator licences under the Canadian Cannabis Act (2018). Every applicant is subject to strict eligibility requirements, including background checks for the applicant and key stakeholders.
The AGCO must be satisfied that you “exercise sufficient control” over the business, that you are not in default on taxes with the Canada Revenue Agency, and that the company is not owned by more than 25 percent by a licensed producer. Fees for the retail operator licence start at $6000.
Retail Store Authorization
Secondly, you’ll also need a Retail Store Authorization. Unlike the Operator Licence, this is on a store-by-store basis. If you are opening two locations at once, you’ll need to apply for two separate authorizations. As per AGCO, this step comes after the licensing.
This authorization covers aspects of the physical layout of the storefront and its location. We’ll get more into location below, but for now, you’ll just need to consider the provincial and municipal guidelines on where cannabis shops are allowed to operate. Plus, the application process mandates that you undergo a 15-day public notice process.
The AGCO recommends that you have already received approval for your new location from your municipality before applying. They also strongly encourage you to read through and adhere to the detailed requirements within the Registrar’s Standards for Cannabis Retail Stores.
Location Selection in a Competitive Local Market
Where should you open a dispensary in Ontario? First and foremost, you’ll have to be in a city that allows it.
Many of Ontario’s largest municipalities have completely opted out of allowed cannabis retail operations. In fact, according to the AGCO, more than 70 different cities and townships have banned legal cannabis stores from opening up within their city limits.
The good news? There are well over 300 places that have welcomed cannabis with open arms.
Second, check out your local regulations. As outlined by the province, there is a basic location requirement that the store cannot be within 150 metres of a school (with a few exceptions).
But your municipality will likely also have additional stipulations. For example, Ottawa requires that stores maintain a distance of 150 metres from recreational facilities, community centres, libraries, and active-use public parks.
With municipal approval and an area in mind, the third consideration for your location comes down to strategy. Consider how much traffic is in the area (both pedestrian and vehicle), as well as nearby businesses.
Ask questions about who is in the neighbourhood and when. Will you hit a lunch crowd, an after-work crowd, or even the evening crowd? Are you around a university, industries, or office buildings? This will help inform who your target audience is and when busy times are.
And in a market like Ontario, you’ll also want to consider your nearest competition. What do they do well? What can you do better? To succeed in Ontario, these are all critical questions to consider within your startup strategy.
Operations Strategy
As all the other puzzle pieces come together, you’ll also need to contemplate your daily operations. For example, how do you manage inventory? How do you manage the back end of the business? What about signage?
Start building a comprehensive operations strategy as soon as possible. Envision all the major pieces you’ll need to run a cannabis store on a daily basis, from reporting to sales to administration. It will help you better understand your initial capital expenses and your ongoing operational expenses.
Overwhelmed? We can help. We have been helping cannabis stores get started in Ontario since the very beginning.
The TechPOS all-in-one ecosystem is a comprehensive solution that does more than just ring through sales. This omnichannel system makes inventory management, compliance reporting, and staff management easy. So instead of trying to piece together a series of disparate systems, you hit the ground running with one.
Are You Ready To Open a Dispensary in Ontario?
Ontario is in the news because it currently boasts the most cannabis stores in the country — but there will always be room for newcomers and disruptors. So long as you adapt to the lessons learned from those before, you’ll be able to hit the ground running as you open your doors.
There are three fundamental takeaways about opening a cannabis store in Ontario:
- Understand the licensing process, including the expected wait times.
- Choose your location wisely and use that intel to determine your unique competitive differentiation.
- Strategize day-to-day operations long before opening day to better grasp CapEx and OpEx.
Interested in an all-in-one business solution that is already working for cannabis stores in Ontario? Schedule a demo with TechPOS Today.
