The cannabis industry in Canada has experienced significant growth since legalization in 2018, with sales reaching over $2.6 billion in 2020, according to Statistics Canada. Ontario is Canada’s largest market for cannabis, with a growing demand for recreational and medical cannabis products.
Starting a cannabis business in Ontario can be a lucrative opportunity for entrepreneurs with the necessary experience, resources, and passion. Additionally, the Canadian government has provided a supportive regulatory framework that facilitates the establishment of cannabis businesses.
It is worth noting that starting a cannabis business is a complex undertaking that requires compliance with Alcohol and Gaming Commision of Ontario (AGCO) and federal regulations, financial investment, and operational expertise.
Businesses need to differentiate themselves by offering high-quality products, innovative marketing strategies, and excellent customer service.
Here are the general steps to follow if you are looking to start a cannabis business in Ontario:
Step 1: Determine the Type of Cannabis Business You Want to Start
You may choose to operate as a cultivator, processor, micro-cultivator or micro-processor, retailer, or cannabis testing laboratory. The type of cannabis business you choose will determine the license application process and requirements.
Here are the steps to follow for determining the type of cannabis business you should start:
Step 2: Obtain a License for Your Cannabis Business
Obtaining a cannabis business license in Ontario requires careful planning, attention to detail, and a significant investment of time and resources. The Cannabis Act and AGCO regulations set out strict rules and requirements for operating a cannabis business.
Here are the general steps you’ll need to take to obtain a license for your new business:
Step 3: Secure Funding
The cannabis industry is still relatively new, and you can face financing challenges due to regulatory and legal requirements.
However, there are several government grants and loans available to new businesses in Ontario. These grants and loans can help you cover the costs of starting and growing your business.
Additionally, several funding sources specialize in providing funding to cannabis businesses.
Here are some steps you can take to increase your chances of securing funding:
Step 4: Find a Location
Finding a suitable location for a cannabis business requires careful research, due diligence, and compliance with local regulations.
Below is a general overview of steps you can take to determine the best location for your new cannabis business:
Step 5: Comply With Regulations and Laws
The cannabis industry is highly regulated in Canada, and failure to comply with regulations can result in fines, legal action, and the loss of your business license.
Below are some of the efforts necessary to make your business compliant with AGCO. You can find more details about laws and regulations on the Commission’s website.
Step 6: Hire Employees
The cannabis industry in Canada is relatively new and rapidly growing, and it may be challenging for employers to find candidates with experience in the industry.
However, networking with industry professionals and attending industry events will help you connect with potential candidates.
Additionally, providing training and professional development opportunities may also help attract candidates who are eager to learn and grow in the industry.
Here are some steps to get you started in your search for qualified employees:
Step 7: Set Up Your Operations
After ensuring compliance with relevant regulations, securing funding, and finding a good location, it’s time to set up your operations. Following are the efforts that will help you get your operations up and running.
Step 8: Market Your Business
Effective marketing can help you attract customers, build your brand, and increase your revenue. However, the cannabis industry in Canada is subject to strict regulations, and you will need to ensure that your marketing efforts comply with these regulations.
For example, you will need to ensure that your marketing materials do not make any health claims or target minors.
Starting a cannabis business can be a challenging but rewarding experience. With the growing demand for cannabis products and the supportive regulatory environment in Ontario, there are many opportunities for entrepreneurs to build successful businesses in the industry.
Whether you are planning to open a retail store, cultivate cannabis, or provide ancillary services to the industry, it’s important to carefully plan your business and ensure compliance with relevant regulations.
With the right approach and a commitment to quality and compliance, your cannabis business can thrive and contribute to the growth of this exciting industry.