Article by Harrison Jordan, Harrison Jordan Law
If you haven’t been living under a rock the past week you have probably heard the reports in the Canadian media that Ontario premier Doug Ford has decided to privatize the sale of non-medical cannabis in the province.
An official announcement has not yet been made by the Ontario government, so I’m hesitant to speculate on what will happen next.
However, there’s a ton of interest in opening up legal retail cannabis stores in Toronto and across the province, and while things are subject to change, there are a few things I think all would-be cannabis retailers should know:
1. You need to know that the margins won’t be pretty
Current medical producers of cannabis typically wholesale their cannabis for up $6 a gram to other licensed cannabis companies. In Ontario, it’s rumoured that even though private stores will be allowed to sell recreational cannabis, the province will act as a mandated wholesaler. Which means you could be paying north of $6 per gram for cannabis before you mark it up to your consumers.
On the other hand, you’ll feel the squeeze from competition to lower your prices.
And keep in mind customers will have to pay sales tax (HST) on top of that.
2. You need a clean criminal and financial record
Based on what other provinces have required from proposed retail stores, you should make sure that all directors and officers, key employees and significant shareholders – and their spouses – hold clean criminal and financial records.
You and the other individuals will probably have to declare any municipal, provincial and federal investigations, arrests, charges, or convictions against you or your spouses, and may make you reveal any government liens against you or your partner, whether you have been a defendant in collection and debt matters, ever had wages or assets garnisheed, or ever declared bankruptcy, for example. That’s some of what the Alberta regulators are asking for, any way.
3. You need a property that is (a) owned or leased – (b) zoned for retail– and (c) compliant with space buffer requirements
First off, you will need to lease or own a property. You may even be able to obtain an agreement to lease with the lease conditional on approval of your retail outlet (that would be most preferable to you if permitted).
Second, you will need to make sure the property is zoned for retail or otherwise meets the municipalities zoning requirements. Some municipalities may only allow cannabis retail stores in certain zones. This is where the services of a lawyer can come in handy.
Space buffers allow communities to feel safe and snug at night by imposing artificial buffers between cannabis stores and other buildings (or between one another).
Space buffer sizes have varied across the country.
The province of Alberta places a minimum 100-metre buffer between cannabis stores and schools and provincial health care facilities. The City of Calgary generally places a 150-metre buffer from schools and emergency shelters and a 30-metre buffer from all churches, pawn shops, and payday loan stores.