Ontario Retail Cannabis Opportunity

Since the legalization of cannabis in Canada, there has been immense interest amongst both multinational corporations and new entrepreneurs to tap into a booming recreational market. Legal recreational cannabis sales amounted to $2.6 billion across Canada in 2020, up a staggering 120% from $1.2 billion in 2019. Ontario accounts for more than a quarter of the sales nationwide, with a total of $717.4 million sold legally in 2020 – up more than 150% from 2019. Due, in part, to aggressive programs by federal and municipal police forces to shut down illicit dispensaries, Statistics Canada estimated that legal sales of recreational cannabis exceeded that of the illicit market for the first time in the second half of 2020. The overall size of the Canadian cannabis market is expected to exceed $8.7 billion by 2026.

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TYPES OF LICENSES REQUIRED

To operate a cannabis retail store in Ontario, you'll need to secure the following key licenses and authorizations:

RETAIL OPERATOR LICENCE

This license is required for any individual or organization intending to own and operate one or more cannabis retail stores. It ensures that the operator meets all legal and regulatory requirements set by the Alcohol and Gaming Commission of Ontario (AGCO).

RETAIL STORE
AUTHORIZATION (RSA)

Each physical store location must have its own Retail Store Authorization. This authorization ensures that the store complies with all zoning and location requirements, as well as the necessary security and operational standards.

CANNABIS RETAIL MANAGER LICENCE

Any individual who will be responsible for the day-to-day operations of a cannabis retail store must hold a Cannabis Retail Manager Licence. This includes tasks such as hiring staff, maintaining inventory, and ensuring compliance with all regulations.

Obtaining these licenses is essential to operating a cannabis retail business legally in Ontario. GrowLegally can assist you through every step of the application process to ensure a smooth and successful launch.

HOW GROWLEGALLY CAN HELP

At GrowLegally, we can handle every aspect of your application process, ensuring you receive your Retail Operator Licence, Retail Store Authorization, and Manager Licence(s) without hassle. Once you’re licensed, we offer comprehensive "Kickstart" services to set your store up for success:

  • Development of training programs for store managers and staff, along with daily operation manuals

  • Setting up accounts with the Ontario Cannabis Retail Corporation (OCRC) for cannabis inventory

  • Assistance with Point of Sale (POS) system setup

  • Merchant account setup with providers

  • Bank account setup

  • Establishing relationships with third-party vendors for cannabis accessories

  • Providing detailed market research and data specific to your retail store’s location

  • Helping develop a procurement list for your first purchase of cannabis products and accessories

INVESTMENT & RETURN

Starting a cannabis retail store requires an initial pre-operational capital investment, typically between $55,000 and $100,000. These costs generally include:

Rent/Carry Costs (First and Last + 3 months): Approximately$15,000 (We recommend keeping rent under $3,000 per month)
AGCO Licensing Fees: Around $10,000
Construction Fit-Out: Between $15,000 and $50,000
Inventory Purchase: Ranging from $15,000 to $30,000

With a conservative estimate, annual revenues for a well-run store in a decent location are projected to be between $650,000 and $1.2 million. Based on current market data and a lean operational structure, you can expect gross profits to be just under 30% to 40% of your annual revenue.

If you have any questions or need further details, please don't hesitate to reach out. We're here to help you succeed and look forward to welcoming you into the GrowLegally Cannabis Supply Ecosystem.

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