Cannabis retail in Ontario: Getting started and best practices

 

 

Cannabis retail in Ontario is coming alive 2019

Greenline POS has seen the ups and downs of a hundred cannabis retailers across Alberta, Saskatchewan, and British Columbia by servicing 30% of the currently active legal retail market in Canada.

The industry today is still constantly in motion with new federal and local legislation and ever changing industry standards. This guide is designed to help you navigate the licensing and operational regulations for a new, compliant cannabis retail environment.

Before you apply:

The AGCO (Alcohol and Gaming Commission of Ontario) is the government institution responsible for issuing licences and monitoring monthly reports from cannabis retailers to maintain compliance. A licence lottery with 25 winners will be announced by the AGCO on January 11th. If you do not get a licence in the first round, Ontario will release more licences as cannabis supply shortages get solved over time during the legalization process. Monitor AGCO news and press releases for information on future licence releases.

It is important to check and see if your municipality has opted out of allowing cannabis retail businesses. The final date for municipalities to opt out is January 22, 2019.

 

Important dates for cannabis retail in 2019

January 11th, 2019

  • Ontario announces its first 25 retail cannabis licenses.

January 22nd, 2019

  • Last date for municipalities to opt out of cannabis retail program.

April 1st, 2019

  • Live retail sales of cannabis from Ontario licensees will begin.

October 17th, 2019

  • Legal cannabis edibles and concentrates hit the shelves of private retailers.

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Non-cannabis municipalities as of Jan 1st, 2019:

 

  1. Blandford-Blenheim, Township of                               Opted-out Wed, 12/19/2018
  2. Bluewater, Municipality of                                           Opted-out Mon, 12/17/2018
  3. Centre Wellington, Township of                              Opted-out Mon, 12/17/2018
  4. Dorion, Township of                                                        Opted-out Tue, 12/18/2018
  5. East Zorra-Tavistock, Township of                               Opted-out Wed, 12/19/2018
  6. Erin, Town of                                                                     Opted-out Wed, 12/05/2018
  7. Frontenac Islands, Township of                               Opted-out Mon, 12/10/2018
  8. Georgian Bluffs, Township of                                          Opted-out Wed, 12/19/2018
  9. Ingersoll, Town of                                                         Opted-out Mon, 12/10/2018
  10. King, Township of                                                        Opted-out Mon, 12/10/2018
  11. Lake of the Woods, Township of                               Opted-out Tue, 12/04/2018
  12. Markham, City of                                                        Opted-out Wed, 12/12/2018
  13. Melancthon, Township of                                           Opted-out Thu, 12/20/2018
  14. Mississauga, City of                                                        Opted-out Wed, 12/12/2018
  15. Niagara-on-the-Lake, Town of                               Opted-out Mon, 12/17/2018
  16. Northern Bruce Peninsula, Municipality of                  Opted-out Mon, 12/03/2018
  17. Papineau-Cameron, Township of                               Opted-out Tue, 11/27/2018
  18. Sables-Spanish Rivers, Township of                               Opted-out Wed, 12/19/2018
  19. Southgate, Township of                                           Opted-out Wed, 12/19/2018
  20. Tay, Township of                                                        Opted-out Wed, 12/19/2018
  21. Tecumseh, Town of                                                        Opted-out Tue, 12/11/2018
  22. West Lincoln, Township of                                           Opted-out Mon, 12/17/2018

 

*For most up to date AGCO info on municipalities: https://www.agco.ca/cannabis/list-ontario-municipalities-prohibiting-or-allowing-cannabis-retail-stores?

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Licencing details

The 3 licences needed for cannabis retail (in order)

  1. Retail operator licence

First, an individual or a corporation must apply for an Operator Licence with the following requirements:

  • The applicant must be at least 19 years or age. For a corporation, all directors, officers and shareholders must also be over 19 years of age.
  • The applicant must not be previously charged with or convicted of certain cannabis-related offences.
  • Illegal cannabis retailers operating after October 17, 2018 are ineligible
  • Individuals owing tax, penalties or any interest under any Ontario or Federal tax statute are ineligible.

 

  1. Retail store authorization.

After acquiring the retail operator licence, the holder must apply for retail store authorization in order to open a physical cannabis retail location. Each storefront location must have it’s own authorization. To get this licence an applicant must meet the following requirements:

  • Municipal requirements on distance from public institutions or schools
  • Municipal requirements on zoning
  • Applicant does not exceed 75 storefronts in aggregate
  • Any other municipal regulations or considerations for cannabis retail

 

  1. Cannabis retail manager licence.

This licence is needed for individuals in your company that have the authority to:

  • Managing employees and oversee the sales of cannabis
  • Managing cannabis compliance reporting and activities in the store
  • Sign for cannabis purchases , contracts, or offers of employment

* If you are the sole proprietor acting also as the manager of your dispensary, the cannabis retail manager licence is not needed.

 

Licence pricing and terms

Retail operator licence

  • $6,000 (2 year term)
  • $2,000 renewal fee (2 year term) or
  • $4,000 renewal fee (4 year term)

Retail store authorization

  • $4,000 (2 year term)
  • $3,500 renewal fee (2 year term) or
  • $7,000 renewal fee (4 year term)

Cannabis retail manager licence

  • $750 (2 year term)
  • $500 renewal fee (2 year term) or
  • $1,000 renewal (4 year term)

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Getting started with licencing

Apply online using the iAGCO (https://www.iagco.agco.ca/prod/pub/en/login.aspx). This is the AGCO’s online service portal. After creating your account, this website will be the place to monitor your licencing and manage renewals.

 

Retail operator licences may require the following documents:

  • Constituting documents (eg. articles of incorporation)
  • Schematic diagrams of the retail space
  • Contact and details of shareholders and directors
  • Financial statements including tax returns and tax assessments

Retail store authorization will require:

  • Business name registration
  • Proof of ownership/tenancy for the proposed retail location
  • Retail operator licence number
  • Business name is compliant with Federal/Provincial regulations for advertising and promotion

Cannabis retail manager licences will require submitting a personal history form using the iAGCO that includes:

  • Past employment and unemployment history
  • Past tax returns or assessments

For additional details please visit the AGCO guide for cannabis retail (https://www.agco.ca/cannabis/guides/cannabis-retail-regulation-guide)

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Additional regulations

AGCO verified training course is required for all staff in a cannabis retail environment before working in private cannabis retail. This training includes and is not limited to the following skills:

  • Understanding the legal and compliance responsibilities for cannabis retailers
  • Basic cannabis product and consumption knowledge
  • Selling cannabis in a socially responsible manner
  • Cannabis sale rules and limits

Source: https://www.agco.ca/content/training

 

 

Physical retail store requirements can include the following:

  • The cannabis sales area must be enclosed by walls separating it from all other businesses or commercial activities
  • Cannot have an outdoor area
  • Cannot be entered from or passed through in order to access any other commercial establishment or activity, other than a common area of an enclosed shopping mall.
  • Cannabis receiving or storage areas must not be accessible by any other business or the public.

Source: https://www.agco.ca/content/retail-store-requirements

 

Operating regulations and restrictions include and are not limited to:

  • Hours of operation must fall between 9:00 a.m. and 11:00 p.m.
  • Must not be within 150 metres of a public or private school.
  • Your official cannabis retail seal must be displayed in an area visible from outside the shop and must be at least 17 cm wide and 20 cm long.
  • Your retail store authorization must be displayed in a visible area.
  • Keep records of all inventory movements and all sales for at least 3 years.
  • Each sale must be traceable back to the employee responsible for the sale and the exact product sold for cases of recalls.
  • You must buy all of the cannabis you will sell in your store from the Ontario Cannabis Retail Corporation and all cannabis must be sold in original packaging.
  • Currently, cannabis stores can only sell dried flower, tinctures, topicals, concentrates, cannabis accessories, and shopping bags.
  • All sales including  ordering must happen in store.
  • Never sell cannabis or accessories to anyone under the legal age of 19.
  • Never let anyone into your store that looks under 25 without checking ID.
  • Never sell cannabis to anyone that looks or is intoxicated.
  • Never sell more than 30 grams of cannabis or dried flower weight equivalent to a single person in a single visit.
  • Never hire anyone under 19.
  • All sales must be processed by staff, no self checkouts or vending machines allowed.
  • All displays of cannabis products and accessories must not be visible from outside the store by a young person.

Source: https://www.agco.ca/content/operating-store

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Next steps and best practices

Now that you are familiar with the process of licencing and the responsibilities of cannabis retail operations, let’s take a look at what makes a successful cannabis retailer and what you can put into action to ensure smooth operations in the future.

 

  1. Prepare your team for the wide range of clients they will encounter

Although the store licence if for recreational sales, keep in mind that cannabis is medicine to many customers. Your staff should be well versed in client needs and the selection of products your store carries. Clients that use cannabis for mental health may appear agitated or confrontational.  Storefront employees working in cannabis retail must provide compassionate care and know how to service customers with disabilities.

Long lasting customer relationships come from taking the time and effort to understand the customer’s needs, not simply selling the client on a particular product.

 

  1. Establish standard operating procedures for your staff

Is there a plan in place for servicing difficult/aggressive customers? Does the storefront have a cash drop procedure? What are the low stock/inventory restock protocols? Written and clearly defined standard operating procedures provide staff the safety net of falling back on pre-designed procedures. Even in the absence of supervisors, your team should know how to run the store efficiently based on pre-set operating procedures.

 

  1. Set proper expectations for team communication

Communication between supervisors and employees is key to maintaining good work environments. The the best work environments, managers are champions for the team’s needs. Losses in communication can lead to breakdowns in established procedures. This is dangerous in cannabis retail if accurate compliance is compromised as a result of poor procedure following. Customer service standards may also take a hit as a result and damage service quality over time.

 

 

  1. Maintain high data security standards

In addition to creating good, lengthy passwords and having proper data entry procedures, store owners should restrict access to sensitive company and customer data. Always make sure you can customize user security roles on your POS to limit the functions staff have access to. For example, employees in probation should not be able to see company data or access discounts. Cannabis retail franchise operations must also block branch stores from seeing centralized reports. This is why Greenline POS comes with customizable employee and locational security locks to serve all sizes of retail operations.

 

  1. Ensure that your inventory system tracks all product movements

When first starting out, potential cannabis retailers often overlook how to deal with inventory losses during transport and purchase ordering. This can result in large cumulative losses in accounting and compliance. To help with stock verification, make sure that your team performs regular stock checks. Your POS needs to have a location based auditing function and transfer loss tracking log as a part of a reliable inventory system.

  1. Use a POS with accurate multi-locational inventory visibility and reporting

For franchisers and chain stores looking to expand up to the 75 storefront Ontario limit, multi location inventory tracking is essential. Without it, you will have no idea when, where, and why cash and stock inconsistencies are happening in your business. Every cannabis retailer must have a reliable POS that is able to handle tracking between all branches of the business, from purchase and processing to customers at final sale. Greenline POS is built to scale from 1 storefront up till 1,000 storefront locations for this very reason.

 

  1. Understand how your POS provider keeps up with future legislation

Where is your software provider based out of? Does your POS company know what laws you need to comply with? If not, how quickly can they address new compliance requirements? Never compromise your licence due to non-compliant software. Ask your POS provider if they can satisfy your compliance needs. The fastest way for a cannabis retailer to fail is by not having the compliance tools they need.

 

  1. Have access to full inventory info from anywhere

Inventory visibility improves internal security and allows business owners to catch, prevent, and accurately account for losses due to theft. You should be able to see reports on all movements of cash and inventory at all times, across all locations. The software should record the actions performed for record keeping in case of any mismatched reports, allowing users to review them and catch any inconsistencies. Have absolute control over your stock, know what you have and where you have it, whenever you want.

 

  1.  Set up proper locational holding limits on inventory and cash

Theft hurts stores and ruins expansion goals. Minimize the pain by limiting stock levels at the front of store. Stores may lose hundreds of thousands of dollars in a single night if risk is not distributed across multiple locations. Cash and inventory needs to be regularly transferred and stored in safe holding locations, separated from the retail environment. Transfers between these storage locations and the front of store should happen daily, and remember to never leave inventory in store overnight. Cash amounts in the register also need to be managed on a regular schedule by creating cash limits. Once a limit is reached, staff need to do a cash drop from the till to a safe.

 

 

  1. Start early on marketing and branding work

Online outreach is critical for building your company’s virtual presence. Establishing a website and adding your business to the local directories (Weedmaps, Leafly, Google business pages) will improve visibility of your retail location and should be done as early as possible.  Securing a retail location doesn’t automatically mean success, there’s always work to be done on growing your customer base (marketing) and establishing your business voice and goals (branding). Most users already have a source for their cannabis so in order to grab their attention, they need need to be aware that your business exists.

 

  1. Establish a clean, safe presentation of the retail space

The look and feel of a cannabis store can make the difference between surviving and closing down. The retail storefront must feel safe, clean, and accessible from the outside. This means increasing visibility with large windows, good interior lighting, clean air, and unobtrusive security measures. Barred windows and doors often contribute to an uncomfortable, illegal atmosphere.

 

  1. Manage how employees and clients use the store space

The behaviour of people in a cannabis store is just as important as the physical appearance of that store. Consumption of cannabis in and around the front door can lead to negative feedback from neighbors. Make sure that customer parking and behavior around the retail environment is considerate of other residents and businesses. Annoying the community is a sure way to get complaints filed against a cannabis store. Having many complaints filed against a store can lead to the closure of a cannabis business.

 

 

  1. Participate in the local community and communicate with neighbours

Cannabis businesses that participate in community outreach and actively engage with their neighbors have a higher chance long term survival. Because the local culture might still not be educated on cannabis use and its benefits, it is the cannabis retailer’s responsibility to promote a positive and open atmosphere. Engage the community by holding information sessions, learning lunches, or free consultations. If the capital is available, sponsoring local events is also a great way to make a brand known in the community.

 

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Ready to start a cannabis dispensary in Ontario?

Here’s 6 reasons why you should choose Greenline POS, a company built by Canadians for Canadians.

 

1) Greenline POS is specifically designed for use in Canadian provinces

Cannabis compliance systems have different rules in Canada and America. You should never be bogged down by bloated features designed for the American market. Canadian and American cannabis retail compliance is very different, resulting in redundant and unnecessary functions for Canadian users if they choose a system built for the USA.

The greatest strength of Greenline POS is our razor sharp focus on Canadian compliance. Our system is tailored for Canadian provinces and we do not do any business outside the country.

 

2) With Greenline POS, PCI certification is provided by the most trusted processors

PCI is short for PCI DSS, and stands for Payment Card Industry Data Security Standard. PCI certification is required for credit and debit processing companies to verify that transactions happen securely and that all client payment info is safe. With powerhouse providers like Moneris and Merrco working with Greenline, you can be confident that your customer’s payment info is fully encrypted and 100% secured. Greenline POS itself is also PCI compliant; we do not ever store any client card details in our system.

 

3) Total inventory management and tracking, live and accurate to the minute

One of the most attractive features of Greenline is our master inventory view and total inventory logs. With this setup, you can record and track every movement of cash and inventory throughout your business no matter how many inventory locations you have company-wide.

Inventory logs on Greenline will track:

  • Which product was moved
  • Timestamp of each movement to the minute
  • Type of movement (sale, purchase order, returns, waste destruction, etc.)
  • Quantity moved (including starting and ending amounts)
  • Employee responsible
  • Location(s) of movement
  • All additional notes (eg. mould, broken packaging, loss, theft, etc.)

 

4) One-click Ontario compliance reports

Greenline provides one-click compliance report generation for the AGLC in Alberta, SLGA in Saskatchewan, and LDB in British Columbia. Your compliance report is the lifeblood of your licence and needs to be 100% accurate and submitted on time. We intend to provide the same level of service to Ontario to make monthly cannabis retail compliance reporting quick and easy. Why spend 3 to 4 business days manually creating a spreadsheet report when your POS system should generate it in under a second?

 

5) Automated Federal and Provincial compliance locks

To make daily store operations smoother, Greenline removes any possibility of jeopardizing your cannabis retail licence with automated compliance checks. For example, when you add more than 30 grams of cannabis items into a cart, the sale button will be blocked to prevent breaking federal possession and sale limits. Other automated compliance functions include warnings when employees attempt to add customers under the legal age to purchase cannabis, and back office dashboard alerts when product details are not setup completely for compliant reporting.

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6) Secure lifetime record keeping accessible anytime you want

Although Ontario has specified that you must keep retail records of sales and employees for at least three years, Greenline offers no time limit on how long records are kept. With daily backups to secure servers located in Canada, Greenline can pull up any data from anytime whenever you request it. Data security is of utmost importance to us, and that’s why Greenline uses Canadian servers exclusively to ensure none of your data crosses the border into the USA.

 

Ready to get started?

You can also take a look at our features, book a demo session or free one hour consultation with our cannabis retail experts today at getgreenline.co

INFO@GETGREENLINE.CO                                                                                         

(866) 845-6931