An industry currently valued at $12 million explains why so many owners want in. 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 dispensary owner directly relates to how much your store makes. Location, competition, and tax rates all influence your store’s profitability.
US Dispensary Profits Offer a Useful Benchmark
US dispensary profit margins help explain what a Canadian cannabis store can earn. As reported in MJBizFactbook 2022, 57 percent of standalone retailers were profitable in 2021.Vertically integrated operations were 65 percent 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. Keep in mind these figures include statistics from massive multistate operators (MSOs), but they offer a useful benchmark for high-level positions across the sector.
For retail 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 salary figures are from 2021.
Canadian dispensary revenue estimates vary significantly by province. 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 While the numbers are a few years out of date (2019), they do suggest potential solid profit margins for the average store: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?
Exact Canadian dispensary owner salary figures are hard to find. This question is genuinely difficult 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 figures 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.
Crunch the operational expenses and you could be pulling in several hundred thousand of that revenue as an owner’s salary.
Canada has many markets, each with different variables. Where you operate, local competition, and intra-provincial nuances all impact gross revenue potential and your salary.
Three Costs That Shape Canadian Dispensary Owner Pay
Staff Costs Consume the Largest Share of Your Budget
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.
A manager position adds $60,000 or more per position to your budget.
Working front-of-house and your compensation for it will also significantly increase or reduce your labour costs.
Taxes Take 44 Cents of Every Dollar at Legal Cannabis Stores
In BC, Ontario, and elsewhere, retailers say 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.
The saying certainly holds true in the cannabis sector: “Nothing is certain but death and taxes.”
The Cannabis Act Review May Adjust Taxes and Supply Rules
The upcoming Cannabis Act review connects directly to ongoing frustrations with taxes. The federal government just launched it this past September (2023).
The government will explore the health and safety impacts of the legal cannabis industry in the review — and the success of the market overall.
The government may adjust taxes and the overly restrictive supply chain because business owners from coast to coast have loudly voiced these concerns to industry stakeholders, including cannabis retailers.
The review could tweak tax and supply legislation to help business owners increase profit margins.
Open a Cannabis Store and Manage It With One System
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