Taking Advantage of a Growing Industry: How to Start a Cannabis Dispensary in Canada

It seems to be all but impossible to go online these days without seeing something related to cannabis, medical marijuana, CBD oil, hemp products, and more. With cannabis and everything related becoming hot topics of conversation, and with legalization becoming more common around the globe, the cannabis business is booming.

How to Start a Cannabis Dispensary in Canada

Provided you have the necessary Federal license, the growth and distribution of marijuana in Canada is entirely legal. There are a few things to be aware of, however. Like any other business, there are certain regulations to be aware of, rules to be followed, and assorted details to be considered.

Starting a business of any type should include professional help and guidance. You will likely find that the knowledge and talents of a variety of people are necessary, or at least greatly appreciated, whether they be lawyers, tax consultants, accountants, or others with specialized knowledge. Starting a dispensary is certainly no different, and in fact probably needs more legal advice that the average business. Growing and/ or dispensing marijuana in Canada will require the appropriate license from the Access to Cannabis for Medical Purposes Regulation program, under Health Canada.

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What You Should Know About Marijuana Dispensaries in Canada

Dispensaries

Being a business, dispensaries operate as for-profit entities. They will dispense products to certain members of the public on a medical basis. Licensees will need to maintain certain records for six years during the period that their license is valid, and for six months following its expiration or cancellation.

Records that you are required to keep include cannabis wholesale purchases, retail sales (which will include quantity and price charged), sales of accessories and gift cards, employee records, and the date, location, and means of disposal of cannabis, including the type and amount.

Most dispensaries will have a storefront to serve customers, with products on display. Customers will be able to discuss their needs and get advice from staff members. All employees, it should be noted, will need to be registered with the province.

 

Compassion Clubs

When learning how to start a cannabis dispensary in Canada, you are sure to hear about compassion clubs, and may be wondering how exactly they differ.

One distinction that is quite apparent is that while dispensaries work as for-profit entities, compassion clubs are non-profit, health-related groups. They are also not part of the federal medical cannabis program.

Cannabis compassion clubs offer not only several strains of cannabis, but also other cannabis products. These can include baked goods and other edible items, oils, tinctures, sprays, and capsules. They also offer organic cannabis, though it is not certified as such. In fact, there is no certified organic cannabis being offered by authorized persons in Canada. For the purpose of safety, the government’s cannabis is gamma-irradiated to eliminate the presence of any harmful mould spores.

Those running the clubs are usually quite knowledgeable about cannabis and its medicinal use. The clubs vary in size and structure, as well as the services they provide. Some make attempts to self-regulate and develop standards of operations by which they do so.

Typically, these compassion clubs will require membership, which is easy enough to obtain by filling in their application and having it signed by a doctor, or in the absence of that, you may provide a note form your doctor confirming your diagnosis.

 

Understanding Canada’s Cannabis Act

The Purpose of the Act

The purpose of the Act is to cover legalization and regulation across the country. It outlines federal processes to be followed in relation to cannabis, whether by growers, users, or those within the marijuana industry in Canada. Through proper legalization and regulation, it is meant to ensure that all federal legislation is followed, and any licensing agreements are maintained.

The Cannabis Act is also meant to protect public health and safety by regulating product quality and safety. It increases penalties for those who attempt to use cannabis or related products with the intent of committing a crime.

The Act essentially provides legal access for producing, distributing and selling marijuana, while implementing measures to dissuade teenagers from accessing cannabis in any form.

 

Marijuana vs Tobacco

Some may be wondering about the relationship between tobacco sales and cannabis sales, but the two are separate from one another. There is both a Cannabis Act and a Tobacco Act, both of which intend to protect the general populace from misusing their related product. The Tobacco Act places a ban on public smoking, and additionally regulates the way in which the product can be promoted and packaged.

 

Some Other Restrictions

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A Clean Record

When learning how to open a dispensary in Canada, you will learn that it is important to have a clean record. In fact, you should ensure that all key employees, major shareholders, and spouses of each have clean records, both criminal and financial. You should declare any investigations, arrests, charges, or convictions against you, whether at a municipal, provincial, or federal level. This also applies to your spouse.

 

Property Requirements

You will, of course, need a physical location for your business, but there are some restrictions on that, as well. The property may be leased or owned, and it must be zoned for retail, or otherwise meet zoning requirements of the municipality, as some municipalities only allow cannabis dispensaries in certain zones. Having the advice of a lawyer would be rather handy when determining this.

You will also need to be aware of space buffers, which requires that a minimum distance be maintained between cannabis stores and certain other buildings. The means by which to measure distance has come into debate, with some contending that it should measure from building to building. However, in some recent cases, the determination has been that it measures from the property line of the cannabis dispensary to the property line of the other building in question.

 

Dispensary Systems

Easier Inventory Management with POS

Systems are available that can simplify your business. Being able to scan inventory, for example, makes things both faster and easier.

As of July 1, 2018, retailers are required to purchase from licensed distributors that provide products to be packaged and labelled according to specific regulations. Inventory is to be received by entering it into a point of sale system before it can then be sold to customers.

Much faster than manually entering all of the information for every individual product, using the proper system allows for a quick scan of a product barcode can to the work for you. This speeds up the process dramatically, and once entered, the owner or manager of the dispensary will be able to make edits to various aspects of the product information, allowing for the quantity to be adjusted, packages to be split, merged, or closed, and sales to be made.

 

Actionable Reporting

In addition to allowing for easier and quicker receiving and management of your inventory, your POS system can provide you with a number of actionable reports that can be exported for customization. These reports include:

  • Accounting
  • Transaction breakdowns
  • Sales by employees
  • Top selling categories
  • Top selling vendors
  • Inventory quantity and value
  • Employee performance
  • End of day reports
    and more

Legal Aspects

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Growing Cannabis Legally in Canada

While Canadians may legally grow, possess, use, and sell marijuana without fear, it should be understood that this is for a limited quantity of the product. This is done to ensure that it is not being misused, and that consumers will need to purchase their product from a federally licensed seller.

For those growing cannabis for home use, there are provisions in the Cannabis Act limiting the number of marijuana plants per household to four (4). To ensure the health and safety of children and teens, the plants must also be kept away from and inaccessible to youths.

 

Advertising is Limited

Those who grow and distribute cannabis will be able to advertise, although there are limitations. The purpose of this is to discourage teens and young adults from purchasing cannabis products. Any ads approved for cannabis must be factually correct and provide not only accurate information on the product, but also details about risk factors as well.

Youths are not to be targeted in these ads, and endorsement by sponsoring organizations and celebrities will not be permitted.

Those seeking to learn how to open a dispensary in Canada need to keep all of this information in mind as they move forward with their plans.