The legalization of recreational cannabis in Canada has become a trending topic in the public realm, somewhat similar to the situation in the United States. Although medical cannabis has been legal since 1999, the country established the legalization of recreational cannabis only in 2018. By doing so, Canada has become the second country in the world after Uruguay to have legalized marijuana nationwide for recreational use.
Ontario is the largest province in Canada and has the largest number of dispensaries and licensed cannabis stores in the country. Ontario sold $725.4 million worth of cannabis in 2020, and $882.7 million in the first eight months of 2021, according to Statistics Canada.
Let us walk through Ontario’s cannabis laws, license types and how to apply for them, tax rates, the current cannabis market, and much more in this blog post.
Can I Open A Dispensary In Ontario Right Now?
Yes, you can. Seek funding, apply for licenses, and look for an IT partner like Cure8 to set up your dispensary.
How much can you buy?
In Ontario, you can buy up to 30 grams of dried or “equivalent non-dried form” from a licensed store. Also, individuals above the age of 19 can buy and cultivate 4 plants at a time.
Current Cannabis Laws In Ontario
- Individuals above19 years of age can buy, use, possess, and cultivate recreational cannabis.
- In public, only those aged 19 and up can possess up to 30 grams of dried or “equivalent non-dry form.”
- You cannot share cannabis in any form with minors, it is a criminal offense.
- The Ontario Cannabis Store, along with licensed retail outlets, is the only place where recreational cannabis can be lawfully sold while adhering to strict federal regulations. Purchasing it from illegal sources other than government-approved retailers is still unlawful.
- Each municipality in Ontario has the authority to select where and whether retail stores should be located in their city or town.
- It is illegal to drive under the influence of marijuana.
- It is illegal to bring cannabis products into or out of the country.
- Children are prohibited to enter cannabis stores, even with an adult.
How Much Cannabis Can An Adult In Ontario Possess?
Regulations in Ontario allow for four to six plants per household. In addition, anyone aged 19 and over is allowed to have up to 30 grams of dry or “similar non-dried form” in public.
Tax Rates In Ontario
In Canada, cannabis is subject to the following taxes: federal excise duty tax, and provincial excise duty tax.
- In Ontario, the excise duty tax stands at + 3.9% of the base or dutiable amount.
- The excise duty on dried cannabis flowers in Canada is either CA$1 per gram or 10% of the gram’s worth, whichever is greater.
- Based on THC content, different excise duty laws apply to cannabis oil and other derivative items like edibles, extracts, and topicals.
In fact, Ontario lawmakers are proposing an increase in cannabis taxes. If the proposal is accepted the taxes will increase from 3% to 10%.
Current Cannabis Market In Ontario
Last year in June, cannabis sales in Canada crossed the C$300M threshold, marking a new baseline for the industry. Legal cannabis merchants in Ontario sold marijuana worth 120.1 million Canadian dollars ($94.6 million) in June 2021.
In fact, for the first time in months, it was reported by The Ontario Cannabis Store that 54.2% of marijuana purchases between July to September 2021 were linked to legal retailers.
Cannabis Dispensary Start-Up Costs in Ontario
The approximate cost of opening a dispensary in Ontario and running it is as follows:
- Mandatory licensing fee – $10k
- Monthly real estate cost (rent, security deposit, etc.) -$10-20k
- For construction, renovation, interior build-out, etc. – $75-400k
- Interior décor, furniture, business equipment – $50-100K
- Professional contracting fee – $30-100K
- Security equipment and installation – $25-60k
- Initial inventory purchase – $50-750k
Therefore, the total start-up cost will vary between $250-1.4m.
How To Get A License
The Ontario provincial government is accepting applications for licenses for all kinds of cannabis businesses. Be ready with the location, and other papers to ensure that your license application is approved as soon as possible.
Here’s what we know about how to open a dispensary in Ontario so far:
- New applicants for growing, processing, or sales for medical dispensary licenses must have a fully constructed site that meets all of the Cannabis Regulations’ standards at the time of application, as well as other application criteria.
- All applicants must undergo a mandatory criminal history background check.
- The Cannabis Tracking and License System has been created by Health Canada as the primary method for submitting licensing applications. The CTLS Getting Started Guide walks you through the processes necessary to create an account.
- A number of people who are associated with an application require user accounts. Before an application to Health Canada can be made, these persons must create their own individual accounts in the CTLS.
- Applicants who are in partnerships, cooperatives, or corporations (essentially anyone who isn’t a sole owner) must additionally create a corporate profile in CTLS.
- Applicants and licensees must follow the Cannabis Act and its Regulations, as well as any other applicable federal, provincial, and territory legislation, local bylaws, and indigenous government legislation.
Types of Cannabis Licenses in Ontario
Following are the types of medical cannabis licenses you can apply for in Ontario:
License For Cultivation
People with this type of license are allowed to:
- Possess cannabis and cultivate, propagate, and harvest cannabis to obtain dried cannabis, fresh cannabis, cannabis plants, or cannabis plant seeds
- The license allows the holder to acquire cannabis for testing, to obtain cannabis by modifying its chemical or physical qualities in any way
- Licensee can possess cannabis upon the request of the purchaser of cannabis plants and cannabis plant seeds. They can also send and deliver cannabis plants and cannabis plant seeds to the purchaser of cannabis plants and cannabis plant seeds to:
- a person authorized to sell cannabis under provincial legislation including particular legislative provisions, or o a holder of a sale license.
License for nursery and License for micro-cultivation are also a part of this permit.
License For Processing
Individuals with this type of license are allowed to:
- possess cannabis and cultivate, propagate, or harvest cannabis in any way other than by synthesis.
- to sell and distribute the following cannabis to a micro-cultivation or standard cultivation license holder:
- dried cannabis, fresh cannabis, cannabis plants, and cannabis plant seeds; or
- Any cannabis that was obtained or generated only for the purpose of performing testing to identify the chemical makeup of cannabis.
License For Sale
Licensees with this type of permits are allowed to:
- to sell and distribute cannabis products to any of the following:
- to a client or, if relevant, to a named responsible adult
- a licensee, other than a person with a license for cultivation
- to sell and distribute dried cannabis, fresh cannabis, cannabis.
License For Analytical Testing
The license holder can:
- To possess cannabis and acquire marijuana by altering its chemical or physical properties by any means.
License For Research
This license allows the licensee to:
- To own, produce, transport, send, or distribute cannabis between the licensee’s designated places for the purpose of research.
- the purchase and selling of cannabis plants and seeds
Ontario Dispensary Fees
Following are the dispensary fee in Ontario:
|Type Of License||Fee 2-yr Term||Renewal Fee 2-yr Term||Renewal Fee 4-yr Term|
|Retail Operator License||$6000||$2000||$4000|
|Retail Store Authorization||$4000||$3500||$7000|
|Cannabis Retail Manager License||$750||$500||$1000|
Requirements For Ontario Dispensary Licenses
Here are some of the major requirements for obtaining a dispensary license in Ontario:
- Criminal background check of the applicant
- Business plan
What Else Do You Need to Open a Dispensary in Ontario?
Understand Cannabis Laws In Ontario
This is important as cannabis dispensaries cannot be launched without being compliant. It is necessary to know about the regulations before you apply for the license so that once it is approved you will be able to quickly set up your dispensary and start selling your products and services.
Create A Solid Business Plan
Understanding your market, obtaining business finance, and strategizing your company’s future are all aided by creating and maintaining a business plan. Writing a good business plan, on the other hand, needs time and resources.
Let us help you create a stable business plan, here is all you must include in it:
Your market, target customers, and competition are all detailed in the market analysis section of your plan. You’ll need to conduct some research to find this information.
Find out what your competitors’ advantages and disadvantages are. Make a list of the demographics you want to target. Determine the size of the market you want to break into.
In your market analysis, you should answer the following questions:
- Who is your target audience?
- What part of the market does your business exist in?
- Who are your competitors?
- How many competitors are in this part of the market?
To properly comprehend the scope of your market, the current players in it, and how your dispensary fits in, you’ll need to conduct some analysis.
Financial Requirements And Projections
Writing a business plan includes a section on financial planning. Keeping track of how much money you bring in and how much you spend is one of the characteristics of a successful business.
The most crucial aspects to examine are funding and financial analysis. Provide supporting financial statistics on your previous and projected financial activity, as well as the amount of capital your dispensary requires. Include income statements, balance sheets, and cash flow statements, as well as other papers that indicate your business’s current financial situation. Make a list of your revenue projections, as well as the costs of inventory, rent, fuel, utilities, salaries, and other expenses.
Include the following points in your financial plan:
- Forecast of sales
- Make an Income and Expenditure Statement
- Formulate a Balance Sheet
- Prepare a Cash Flow Statement
Products And Services
Now comes the exciting part of your company plan: deciding what you’ll sell. If you’re like most business owners, you’re probably more interested in operating your dispensary rather than in figuring out how to structure it.
This component of your business plan details your products and services, as well as how they benefit your clients. Also, talk about the unique value proposition of your products. Describe what makes your products or services stand out from the competition.
How do you set your prices? Describe the price sensitivity of your products or services. Examine each product or market category separately. Determine where you make your money and where you can improve your margins or sales. Explain how you set your pricing.
Partnership, Management, And Team
This part covers how you’ll staff and run your company, who the owners are (if there are more than just you), and the types of employees you’ll need. Include team members you plan to hire as well as those who are currently working with you. Create a one-paragraph profile for each member of your current core team, including yourself.
Organize The Plan Logically
You can organize the above information in a variety of ways to share it with possible investors and lenders, present and prospective team members and managers, and anybody else who needs to understand your vision.
Do some research and come up with a business plan framework that works for you. Different types of plans exist for different types of readers, such as investors vs. employees, so you may tailor your strategy to your target market.
A few things to keep in mind:
- Make a cover page and a table of contents so that information is easily accessible. If you’re printing it out and putting it in a binder, consider utilizing dividers with tabs.
- You may also want to include a section on Action Plans, which includes information on regulations, legal and compliance issues, safety processes, operational and management plans, an employee handbook, delineations of your staff’s job descriptions, and anything else you’ve put on paper, depending on what you do or sell.
- Use an appendix to contain any further information, such as financial and market analysis, logo and branding examples, team resumes, and so on.
Changes in your business, industry, or market should be reflected in your business strategy. To keep your strategy current, make revisions as needed to meet changing client wants or changing economic situations. Treating your business plan as a live document and revising it on a regular basis will help you stay ahead of the game and achieve your goals.
Choose The Best Team
Having a clear vision for your business is necessary for building a successful team. However, rather than merely checking off a list of qualifications, it also necessitates paying close attention to the person you are evaluating for your team. They must possess the willingness to learn, grow, and maintain an open mind.
Your organization may become a place where everyone excels when you surround yourself with people who bring varied strengths, work styles, viewpoints, and goals.
Choose Your Location With Care
Business owners understand that location is crucial to their success, and cannabis retailers are no exception. The question is if you can find that perfect location while still adhering to the plethora of laws established by both the province and that specific municipality. Choosing a location for your cannabis dispensary requires hard work and is a time taking process. But you must put in all your effort to get the best location for your dream project.
Partner With A Leading Technology Partner
Experienced IT support is vital for any dispensary, and the best way to achieve it is by hiring an IT support company. But not every dispensary is created equal. You need one that is right for your business.
With our two decades of experience, we understand that the collaboration between dispensaries and IT partners can be a complex one. Hence, Cure8 makes sure that your business faces no roadblocks and the tech integration of your cannabis dispensary is a smooth one.
How Can Cure8 Help?
Cure8 is a cannabis IT solutions provider company that has over two decades of experience in helping cannabis businesses achieve their goals.
We deliver high-quality tech services to ensure that your dispensary IT infrastructure is more reliable and stable, all while keeping IT expenditures down.
We manage the complete IT infrastructure or any of its specific parts. Cure8 can help you grow your cannabis business with our customized plans curated for your needs.
If you are in need of an expert IT support company, then contact us today.