Brace yourself as we dive into the journey of opening a cannabis dispensary in Ontario. We'll navigate through dispensary start-up costs, licensing requirements, selecting the ideal dispensary location, understanding public notices, and undergoing rigorous inspections and compliance checks. This guide serves as an essential resource for aspiring cannabis entrepreneurs, preparing you for a successful entry into Ontario's evolving cannabis market.
Let’s jump right in.
Retail Cannabis Dispensary Start up Costs: How much does it cost to open a cannabis dispensary in Ontario?
The initial investment for launching a cannabis dispensary can widely vary and is influenced by factors such as location, size, design and merchandise selection. You should be prepared for start-up costs ranging approximately from $150,000 to over $950,000. Yes, you read that right, and no, we haven't been sampling the merchandise!
While we understand that this is a wide range, it's crucial to have a realistic understanding of the financial demands of this endeavour. Fear not, for we have rolled up our sleeves to craft a comprehensive guide for you. This isn't just any guide; it's your GPS through the world of cannabis retail in Ontario. Stick with us till the end of this guide, and you'll emerge more enlightened how you can open your dream cannabis dispensary.
Step 1: How to Apply for Retail Operator Licence (ROL)
Operating a retail cannabis dispensary in Canada requires specific licensing and insurance requirements to ensure legal compliance to protect you, your business, your employees, and your customers. To operate a retail store and sell recreational cannabis, you must apply for a Retail Operator Licence (ROL). Applications for a Retail Operator Licence (ROL) are exclusively submitted through iAGCO, the Alcohol and Gaming Commission of Ontario's (AGCO) online licensing portal.
To get this licence, you must meet all of the eligibility criteria set out in the Cannabis Licence Act, 2018 and its regulations. You can find the Cannabis Licence Act here: https://www.ontario.ca/laws/statute/18c12
To speed things up, here's a list of key factors to check before applying, as they might disqualify you from obtaining your ROL License.
- The AGCO doubts your ability to sufficiently directly or indirectly control your cannabis retail business.
- You haven't filed a required tax return in Ontario, owe taxes, penalties, or interest, and haven't arranged to pay them.
- You have a business number with the Canada Revenue Agency but haven't filed certain required federal or provincial tax returns.
- If applying as a corporation, and a licensed producer or their affiliate owns or controls more than 25% of your corporation.
- Keep in mind that background checks are mandatory for all applicants and related parties during the review process.
The processing time for a Retail Operator Licence (ROL) can vary based on a number of elements, including the complexity of your corporate structure agreement, the specifics of your third-party contracts (if any), and the number of stakeholders involved.
What Is The Fee For Retail Operator Licence (ROL)
The cost for Retail Operator Licence (ROL) is $6,000.00 for a 2 year term and a renewal fee of $2,000 for 2 year term and $4,000 for a 4 year term. You can apply for a Retail Operator Licence (ROL) here: https://www.iagco.agco.ca/prod/pub/en/Login.aspx
Step 2: Choose The Best Location For Your Retail Cannabis Dispensary
Location, Location, Location. This timeless principle rings especially true when it comes to setting up your cannabis dispensary. The key is to strike a balance between being visible and accessible, while also remaining compliant with all regulations. Keep in mind that securing the right spot is a prerequisite before you can apply for your Retail Store Authorization (RSA). (More on RSA in the next step)
What Cities Allow For Retail Cannabis Dispensaries?
You'll want a spot that’s easily reachable and visible to your target market, ensuring a steady flow of foot traffic. At the same time, it's vital to ensure your location is in one of the municipalities that has opted in, and allows for cannabis retail stores in their communities and adheres to the distance regulations from schools.
At the time of writing this article, the municipalities that allow for retail cannabis stores are:
- Toronto
- Ajax
- Aurora
- Barrie
- Belleville
- Brampton
- Brantford
- Burlington
- Hamilton
- Kitchener
- Milton
- Mississauga
- Niagara Falls
- Oshawa
- Pickering
- Uxbridge
For a full list of Ontario Municipalities that allow or prohibit cannabis retail check out: https://www.agco.ca/cannabis/list-ontario-municipalities-prohibiting-or-allowing-cannabis-retail-stores
What Is Retail Cannabis Dispensary Proximity To Schools?
Your proposed cannabis retail location CAN NOT be located within 150 metres of a school or private school, as defined by the Education Act. Let's break down how this game of 'measuring tapes' works:
- If the school or private school is the main occupant of a building, measure 150 metres starting from the school property's boundary line. Think of it as a 'no-cannabis bubble'.
- In cases where a school shares its space with other occupants in a building, start measuring from the edge of its dedicated space within that building.
- The distance between your cannabis retail store and the school is measured in a straight line from the nearest point of the school property or boundary (as described above) to the nearest point of your proposed retail store. Picture drawing an invisible, straight line from the nearest point of the school's 'bubble' to the closest point of your hopeful store. That's your measuring stick.
- And here's a twist: if the store or school is on any floor other than the ground floor, you might need to include a vertical ruler in this game. The 150-metre measurement may include vertical distance to ensure compliance.
Exceptions? Sure! If the school is on a reserve or exists only in the virtual world of the internet (exclusively offers online classes) the above rules do not apply.
Step 3: How To Apply For Retail Store Authorization (RSA)
After applying for your Retail Operator Licence (Step 1: ROL) and choosing the perfect spot for your cannabis venture (Step 2: Choose The Best Location For Your Retail Cannabis Dispensary), you must then submit a Retail Store Authorization (RSA) application. Remember, submitting your RSA application doesn't mean you're in the clear just yet. Think of it more like tossing a hat into the ring rather than wearing the winner's crown. Approval depends on how busy iAGCO is, and not at the moment you hit 'send' on iAGCO.
As for the waiting game, applications get the look-over in the order they come in. The speed of this process can vary and depend on factors like your lightning-fast (or not) responses, how quickly you can get possession and set up shop at your proposed location, any feedback received during the public notice period, and just how swiftly you can get your store from an empty shell to inspection-ready. It's a bit like preparing for a big party - the faster you get the decorations up, the sooner the fun begins!
What Is The Fee For Retail Store Authorization (RSA)
The cost for Retail Store Authorization (RSA) is $4,000.00 for a 2 year term and a renewal fee of $4,500 for 2 year term and $7,000 for a 4 year term.
Cannabis Public Notice Posting Period
You can only kick off this public notice phase after you have taken control of your proposed store location. Public Notice serves as a chance for both the municipality and its residents to voice their opinions to the Registrar about whether giving out your RSA aligns with the public's best interest.
The AGCO plays the role of setting the schedule for this notice period, which spans 15 calendar days. They'll send you over the Public Notice placard in PDF format via email. It's your job as the applicant to ensure that several copies of this Public Notice placard are displayed prominently at your store location for the entire 15 days as specified on the placard. The application will also be available for public view on iAGCO, allowing for submissions during this 15-day window. Plus, the AGCO will give the application a shout-out on Twitter.
Now, if the Public Notice isn't posted as required, it's not just a tiny oops – it can cause a hiccup in processing the application. It might even lead to an encore performance, requiring the notice to be posted again for another 15 days. Here is a sample of how the Public Notice placard looks.
After the public notice period wraps up, the AGCO will send you copies of any submissions they received. Typically, you can expect to get these copies within 10 business days following the end of the submission period. Once these written submissions are in your hands, you have a window of 5 calendar days to draft and send your responses to these submissions, which may come from local residents or the municipality, back to the Registrar. The Registrar will then take some time to go through both the submissions and your responses as part of their review process.
Step 4: Retail Operator Licence (ROL) Approval
Once your Retail Operator Licence has been reviewed and ticks all the boxes, the AGCO will shoot you an automated email and issue the Retail Operator Licence (ROL).
There's usually a bit of a waiting game between the moment an applicant is granted their Retail Operator Licence (ROL) and when they finally receive their Retail Store Authorization (RSA). At this point, you can start interacting with OCS Client Services. But remember, you can't start ordering products from the OCS until you've got your Retail Store Authorization (RSA) in hand.
A little heads-up: If you've got any agreements with third parties up your sleeve, it's best to lay them on the table when applying for your ROL, if possible. Keeping them under wraps until later can slow down the review process and delay getting your ROL and RSA. And just so you know, if you submit amendment applications after your licence or authorization has been issued, don't expect a fast-track service. These amendments could further delay the issuance of your ROL and RSA. So, better to be upfront and clear from the get-go!
Step 5: Cannabis Education & Pre-Authorization Inspection
While you wait for your RSA, you are assigned to an AGCO Inspector for an education session. During this session, the inspector will offer insights into the cannabis regulatory framework and explain the requirements under the Registrar’s Standards, particularly focusing on what's needed for both the pre-authorization and pre-opening inspections. Your inspector isn't just a one-time guest star; they're available for ongoing education, turning into a trusty encyclopaedia for retailers to stay on top of their game and, most importantly, on the right side of compliance. It's not just learning; it's an adventure in cannabis compliance!
Your session includes:
- Store premises, equipment and facilities, including surveillance and security the prevention of unlawful activities
- Advertising and promotional activities
- Training and other measures related to the responsible use, sale or distribution of cannabis
- The protection of assets
- record-keeping and measures to maintain confidentiality and security of records
- compliance with the federal cannabis tracking system.
During this pause, it's a smart move for you to review your licensing and reporting requirements, refine your business plan and merchandising strategy, and put those final touches on the grand vision for your store. Think of it as doing your homework to ensure everything runs smoothly once the doors officially open.
Once you are complete, your AGCO Inspector will arrange and carry out a pre-authorization inspection for your store. The purpose of this inspection, which can be conducted either virtually or in person, is to verify that your store complies with all AGCO regulations and standards. This inspection typically takes about 1 hour to complete.
Step 5: Retail Store Authorization (RSA) Approval
The AGCO will make the big decision on your application approval when a few key milestones are hit:
- You've successfully received your Retail Operator Licence (ROL).
- The Public Notice period has been wrapped up, complete with all the community feedback and your responses.
- Your store has passed the pre-authorization inspection with flying colours.
- Every piece of paperwork and application-related task has been thoroughly reviewed and ticked off the list.
- Deputy Registrar conducts a final school proximity review
A little heads-up: The current pace of approvals is set by the government and is currently maxing out at about 30 RSAs a week. So, keep your eyes on the prize and your ducks in a row, and you might just be the next in line for that golden ticket!
Once your RSA has been approved, an automated email courtesy of iAGCO, will land in your inbox, bringing with it the much-awaited RSA attachment. This email isn't just a congratulatory note; it's also a guidebook, containing crucial Ontario Cannabis Store (OCS) onboarding information.
Step 6: Ordering Cannabis Product and Receiving Product from Ontario Cannabis Store (OCS)
Before you place your first cannabis order, you must sign a commercial agreement with the Ontario Cannabis Store (OCS). This process takes about 10-business days. Of course, this timeline is under the assumption that all the OCS onboarding requirements are met without a hitch. Once you have crossed the T's and dotted the I's you will now be welcomed as an OCS Wholesale Client and will be assigned a date for your very first order.
Orders are placed through a wholesale account on the OCS Wholesale Portal and items are shipped In just about 2 business days.
Step 7: Open The Doors To Your Cannabis Dispensary
But wait, there's one final step! After your order has been received, opening the doors to the public isn't a 'next-day' affair. The AGCO still needs to play its part with a pre-opening inspection. This is the final checkpoint before the 'Open' sign can gleam in the window.
Make sure to:
- Display the Provincial Retail Seal. This badge of honour is part of your iAGCO approval notice, and it's not just for show – it's a symbol of your legitimacy in the cannabis world.
- Stick to the retail reporting requirements, adhere to the Registrar’s Standards, and follow all the relevant regulations and legislation. Think of these as the rulebook to the cannabis retail game – play it right, and you're set for success.
So, with the seal up and the rulebook in hand, it's time to open the doors and roll out the green carpet. At Project92 Construction, we bring a wealth of knowledge and expertise to the table. Our experience in building retail cannabis store dispensaries equips us to offer pivotal insights. Find out how we can help you navigate the intricacies of design and construction, and ensure your venture is not just built, but strategically optimized for success in the competitive world of cannabis retail. Connect with us to learn more.
