Critical Next Steps for Prospective Cannabis Retail Store Owners in Ontario

The Government of Ontario is moving towards an open market for retail cannabis stores starting in January 2020.  British Columbians and Vancouverites in particular can now legally purchase non-medical cannabis from the LDB’s online BC Cannabis Store. For those looking to take advantage of this opportunity, there many things you should be considering and doing immediately.

1. Get Informed

• The Alcohol and Gaming Commission of Ontario (AGCO) will start accepting licence applications from prospective retailers on January 6, 2020.
• Specific store owner authorization applications will be accepted beginning on March 2, 2020.
• Licenses will start being awarded in April, at a rate of approximately 20 licenses per month for the next year.
• Pre-qualification requirements for prospective retailers have been eliminated.
• Licensed producers can now engage in the retail market by opening a store at one of their facilities.
• Retailers will be able sell cannabis-related items such as cannabis magazines and cookbooks.
• Prospective retailers will need to post a public notice at their proposed retail location; the AGCO will accept feedback from the local community for 15 days.
• Authorized cannabis stores will be able to offer click and collect services, letting customers order and pay for products online for in-store pick-up.

2. Build a Workforce

• Recruiting employees for your retail store should be an imminent consideration given the number of new retail outlets being opened in 2020.
• The right skillset – whether it is in treatment, sales or security – will be key, along with finding employees that are trustworthy and hardworking.
• If you need resources for hiring, Cova’s cannabis retail job description template (https://www.covasoftware.com/ cannabis retail job descriptions) provides direction on hiring qualified, competent employees for your cannabis store.

3. Train Employees

Some critical questions to consider are:

• Have you sufficiently budgeted for implementing your training program?
• If you are outsourcing training, have you identified which program(s) you will use?
• Do you have agreements in place with the facilitators of these programs?
• Have you addressed the logistics of training your employees?

4. Source Product

• Sourcing has been a concern for cannabis retail outlets across Canada, with many stores scrambling to secure product from suppliers short on inventory.
• As you apply for your license and await approval, you should already be establishing relationships with suppliers. You can put deals in place that are contingent on your receiving a license.
• Thoughtful agreements with multiple suppliers will ensure product availability – and variety – to your customers.
• The above points will allow you to be well positioned to build your inventory immediately upon receiving your license.

5. Prep Your Facility

• If you can’t start work on your facility immediately, work with contractor(s) to get your work on their calendar.
• Have alternative contractors in mind in case these contractors cannot get started on time (or at all).
• Attempt to lock in prices for materials and labor ahead of time.
• Any approvals necessary for designs (architectural review, etc.) should be obtained as soon as possible.
• Ensure that all construction involving design is coordinated with the installation of the necessary security controls.

6. Streamline Operations

• You will need to implement software for streamlining sales, inventory and employment data.
• Vendors such as Cova Software provide tools for handling this.
• Once you have chosen a program, the next step is getting it up and running. If any customizations are necessary, they should be implemented as soon as possible.
• You may find that you are best off using multiple software solutions for handling point of sale, inventory, security and fulfillment and any other component of operating a successful store.
• If this is the case, has all the software been integrated onto a platform that provides the functionality you need? Have you tested the system? Have you familiarized yourself with administrating the software?
• You should consider that cannabis stores will be allowed, once authorized, to offer click and collect services that let customers order and pay for products online for in-store pick-up.

The reality is that prospective retail store operators cannot afford to sit idle while their license application is prepared and then reviewed. Preparations and arrangements must not be put on hold as you wait to find out whether you’ve been awarded a license. Gaining this edge in what is certain to be an increasingly competitive marketplace will be crucial to creating a successful cannabis retail enterprise.

For more information and guidance, contact Segev LLP at 1-800-604-1312, [email protected] or visit us at our Vancouver office or visit us at www.segev.ca.

Authors: Alon Segev, Managing Partner and Eric Kroshus, Articling Student.

Disclaimer

The above blog post is provided for informational purposes only and has not been tailored to your specific circumstances. This blog post does not constitute legal advice or other professional advice and may not be relied upon as such.