How to Open & Start a Dispensary & Get an Ontario Cannabis Retail Licence

The Ontario government allows licensed, private retail stores to sell cannabis and cannabis accessories in brick and mortar stores. Toronto based Lawyer Harrison Jordan has experience assisting those who were selected by the AGCO to submit applications to sell cannabis in their proposed retail store.

The AGCO has held two lotteries to decide who will obtain the opportunity to apply for a Retail Operator Licence (ROL) and a Retail Store Authorization (RSA) under Ontario’s Cannabis Licence Act, and subsequently sell cannabis and cannabis accessories. These applications are required and will cost you around $10,000 total initial application fees, plus fees to apply for Manager Licences.

No you do not. It is not a requirement.

However, Harrison Jordan is a Toronto-based lawyer & cannabis consultant that focuses exclusively on cannabis matters. He has multiple clients with cannabis retail stores. He has a nuanced understanding of the entire process and can help you from point A to Z.

Capital Requirements to Open – The most important thing to consider. It will cost a lot of money to open a cannabis store. Application fees on their own can top $10,000 from the AGCO, and in addition to that you will have to spend thousands o dollars on obtaining real estate, obtaining security systems, and building the store up to the province’s standards. I tell clients that at the very least they should have access to $150,000 in total funds to get their store open. Depending on the location and renovation, that amount could increase. You’ll want to select the best location and have an optimized customer experience, which is I typically recommend clients have at least $250,000 in capital to start the store.

Background Review – If you are a shareholder, owner, part-owner, director or officer of the applicant, be prepared to file information related to your background and integrity. You will be asked whether you have been charged with any provincial or federal offences and whether you have ever declared bankruptcy, amongst other things. The AGCO can refuse a Retail Operator Licence or Retail Store Authorization in the event that the applicant, or a person “interested in” the applicant has demonstrated that there are reasonable grounds to believe that they will not be financially responsible, having regard to their financial history, or that they will not carry on business in accordance with the law, with integrity, honesty or in the public interest, having regard to past or present conduct.

TCV Number– You will need to obtain what is called a TCV number from the government when you apply for the Retail Operator Licence. Haven’t generated more than one TCV Number I can take care of that for you.

Corporate Documents – You will have to attach your company’s articles of incorporation and it is a good idea to attach any By-Laws, as well as Shareholders Agreements.

Details of Shares – Each shareholder holding 10% or more of the shares must be disclosed.

Tax Return and Assessment & Financial Statements – The applicant’s financial statements must be uploaded unless it is a new company. All individuals required to fill out

Expect to spend at least $150,000, or more comfortable $250,000 to $300,000, as the total initial investment for a retail store if you are starting from scratch (that includes rent). Costs can get even more expensive depending on how complex your desired build is. Do you already have a location secured and paid for? That can lower

Profit can vary, but I tell clients they may an average gross sales of $500,000 to $1 million per store. Some clients have had annualized sales closer of $7 million+, however that should be viewed as the exception – particularly as every day there is more and more saturation and competition at every corner. Note that I cannot guarantee that you will make a certain amount of money with your cannabis shop business but I will assist you to make operation go smooth.

After your 15-day public notice period commences you will have an inspection conducted by an AGCO compliance official (aka an inspector). They will arrive and ensure that the location matches the address, ensure the placard is still up appropriately (if still within the 15 days of the notice period), that cannabis products or accessories cannot be seen from the outside from any vantage point even when the front door is open, that a video camera system has been installed capturing 24/7 video in major store areas, that you have a locked and secure storage room, and that the store is enclosed by walls and separated from any other commercial establishment or activity and from any outdoor area.

In addition, they may want to confirm with you that the store cannot be entered from or passed through in order to access any other commercial establishment, other than a common area of an enclosed shopping mall. Entry points, such as doors and windows, must be secure.

You will then receive your Retail Store Authorization from the Alcohol and Gaming Commission of Ontario.

From there, you will need to sign up to OCS Wholesale, place your order, and stock the product when it arrives. Congrats, you’ve opened up a cannabis retail store!

Cannabis retail stores, also known as dispensaries, will need to obtain a Cannabis Retail Operator Licence (CROL) for their corporation and a Cannabis Retail Store Authorization (CRSA). The Alcohol and Gaming Commission of Ontario charges an application fee of $6000 for a CROL and $4000 for each CRSA. Of course, on top of that you will need to consider the costs to open a cannabis dispensary, including rent, inventory, labour costs, and working capital.