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Selecting a Store Location

Canada is on the verge of becoming the first G7 country to legalize cannabis, and the shift in the retail market for cannabis will explode as towns and cities across the country open their doors to more brick and mortar cannabis shops.

It is imperative to research the local politics and connect with municipal leaders.

Part of what will separate the winners and losers will be the location of their dispensaries. The uniqueness of the opportunity of opening a cannabis retail location is fraught with potential problems, and there are six vital aspects to consider when deciding where you want to set up your business:


Local Politics and Legislation

The first and most important consideration when scouting for ideal retail locations when cannabis becomes a legal commodity will be the local regulations. Provincial politicians will be making decisions based on community interests, such as health, safety in public spaces and keeping cannabis away from children and youth. These regulations will vary widely throughout Canada, which means some places are more likely to embrace, and incentivize cannabis retail while others may make things more difficult. It is imperative to research the local politics and connect with municipal leaders and learn what benefits or challenges you will face. Some communities and cities which have already allowed for medical cannabis retail locations are likely most receptive and knowledgeable as they have already gone through the process, but having done so they could be also wary of a new influx of cannabis shops. Many of the current medical cannabis retailers will be applying to sell adult-use cannabis and may have an advantage, having already met the criteria previously applied to them. Saturated markets are not ideal, although there will be desirable hot spots worth fighting for.

Cannabis tourism will be a draw to many places throughout Canada, so proximity to hotels, airports, boat cruise terminals and existing tourism infrastructure such as wine tours should be considered. An indicator of the advantage of such locations is that the busiest cannabis retail outlet in Colorado is the one closest to the airport.

Understanding Landlord’s Concerns

Landlords may have legitimate concerns about renting to a cannabis business due to several issues including security and odour. Others will be happy to rent to a business that will enhance their community, be successful and act as a good neighbour. It’s worth the effort to find a good landlord that wants to work with you, rather than add to the stress of starting a new business. With many unknowns about the new wave of cannabis businesses on the horizon, it promises to be an exciting time for everyone, but with this comes some apprehension. Some landlords will have reservations, so it will be important to be sensitive to their concerns while at the same time finding the right fit for you both.

Being Part of a Good Neighbourhood

Finding a location in a good neighbourhood where your business is welcomed and appreciated is a prime objective. Although passing foot traffic is very important, there are some other issues to consider. New cannabis shops will be closely scrutinized across the country, so being a good neighbour will be imperative. Participating in community events, joining the local Chamber of Commerce and Business Associations would be a good first step. Communicating with your neighbours personally, via newsletters and in the media will help create the necessary goodwill that any successful retail space would want to create.

The Size of the Unit

In the early days of legalization, retail outlets may opt for a similar, clean-cut design like those of medicinal cannabis retailers. An ideal store size is 1250 sq. ft. according to a popular dispensary owner. It is possible that over-the-counter sales will be separated from other cannabis ventures, including lounges and cultivation. A highly functional space will create the most return on your initial investment. As Canada warms up to legalization many cities may allow for other cannabis-friendly activities to operate in the same space and retailers are considering this as they choose their flagship location. This also applies inversely to other cannabis businesses including farms and lounges. Consider the capability of expanding your services when finding your ideal space.

To Own or to Rent?

Purchasing a commercial space has many advantages. In the future, a legal cannabis retailer adhering to provincial and federal regulations should not have to face any pressure from law enforcement and landlords. This has happened in the past to unlicensed retailers, so being wary is understandable, even for licensed retailers and producers. Being your own landlord protects you from potential interference of your business. You will also have more flexibility if you choose to expand your business model by not having to gain permission from landlords. It’s also wise to consult with a tax lawyer to determine the advantages of owning versus renting.

Consider your Long-term Plans to Expand

As the legal cannabis retail sector develops and matures, savvy entrepreneurs will create unique and exciting opportunities. Expect to see cannabis-friendly restaurants, hotels, spas, retreats, yoga studios, coffee shops, farms, lounges, and lifestyle brands entering into the new legalized market. Having long-term business plans to expand into other areas that can incorporate cannabis culture certainly impacts on making a decision on your location. For example, would incorporating cannabis with yoga be enough to distinguish you in a place where there is a wide choice of yoga classes?

Consider the capability of expanding your services when finding your ideal space.

Making sure that the locations you are considering align to your future business plans can ensure that any ambitions you have as a licensed cannabis retailer aren’t stymied. It can mean the difference between taking on well-established competition and capitalizing on your ability to offer something innovative that an expanding cannabis culture would want to be a part of.

As we’ve seen, choosing a location for your licensed cannabis store is certainly not an easy task. It’s fraught with pitfalls, and not just those of the business decision kind. It’s best to start by looking closely at your provincial and municipal regulations. These will give you a basis on which to make a sound decision, and if there are elements that may seem confusing, it could be worth your time hiring the services of a realtor that specializes in cannabis spaces. With a professional onboard, you can be freed up to make other important decisions regarding your location.