Launch a cannabis business (Canada)

Canada was the second country in the world, after Uruguay, to formally legalise the cultivation, possession, acquisition and consumption of recreational cannabis and is the first G7 and G20 nation to do so. It is also the home of the worlds largest cannabis company, Canopy Growth Corporation, along with many other well known names; Aphria, Aurora, Tilray, Organigram, Cronos etc. If its good enough for them it may be good enough for you

Immigrant-owned businesses

Unlike some of the other places we have covered in our series on ‘the best places to launch a cannabis business’ Canada allows for immigrant-owned businesses without having to have previously been a resident. There are two main routes you can take to starting a business in Canada. First, you can apply for the Start-up Visa program which is considered as the Federal business immigration program, which means you can start your business anywhere in the country. Second, there is the province-specific Provincial Nominee Program which has several business immigration options.

Forward planning

Research

  • Research your province or territories laws, as well as any local municipal regulations, for cannabis consumption and starting a business.
  • Find out what documentation and information you’ll need to provide to get a cannabis license.
  • Market analysis. Is there a great market need for your business? Who will be your competitors? Are there trends that your business is looking to capitalise on?
  • Organisation and management. Choose a legal structure for your business. Create an organisational chart to show who will lead your business.
  • Marketing and sales. How will you find customers, and what defines a sale — or the point at which you make money — in your business?
  • Financial projections. What will your revenue and expenses look like? Make financial forecasts for at least the next three years, and explain why they make sense.

Obtain a license

Precisely how you get the right to legally sell cannabis varies from province to province to territory. In Ontario, it’s a lottery system, meanwhile, Alberta and British Columbia have a rolling application system with no cap, although there’s a limit on how many stores a single entity can own. It’s also important to note that not everyone is eligible to hold a license and there are certain ‘criminal convictions’ that will prevent you from obtaining a licence. Also in certain provinces (Quebec, Prince Edward Island, New Brunswick and Nova Scotia) all retail outlets are exclusively government run.

  1. Micro;
  2. Nursery;
  3. Hemp.
  1. Standard processing license.

Capital investment

Most banks aren’t entertaining business loans for cannabis retailers, deeming it too high risk. Also investment is getting more difficult to come by as the industry matures and those early stage investors have already committed themselves to other ventures. This can be a major problem for some companies, since Ontario requires permit holders to prove they have access to $250k to fund their business before they can be considered for the lottery. However don’t lose hope as there are some online lenders, credit unions and alternative banks that will loan to cannabis businesses

Summary

Wall Street has projected between $50 billion and $200 billion in annual sales, making Canada one of the most lucrative locations to launch your cannabis business.