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10 Tips on How to Launch a Compliant Cannabis Retail Chain

By Lucas McCann

Compliance is king. This very notion is paramount to the success of any retail chain looking to make headway in its respective markets. This certainly does not exclude the cannabis industry. To empower prospective cannabis retailers with knowledge and resources needed to launch a successful and compliant cannabis retail chain, here are ten crucial tips: 

  1. Research, Research, Research

The most important step in launching a compliant cannabis retail store is research. Every aspect of your business needs to be thought about at the outset. Research builds the foundation and breathes life into each step below. It’s the true lifeline of cannabis retail chain preparedness and compliance. 

  1. Understand your regulators 

In Ontario, for example, if you want to launch a cannabis retail chain, you would need to make sure you are operating under the Alcohol and Gaming Commission of Ontario (AGCO) who is the provincial regulator. Usually, during the licensing and application process, officers from the assigned governing body, or in Ontario’s case, the AGCO, will check to see if your retail store has been designed to be compliant with all provincial regulations. You must also meet any applicable federal and municipal requirements. Once the store opens, the AGCO will periodically visit the location to conduct inspections to ensure you are operating up to the government’s standards.

  1. Talk to existing retailers

Relative to most industries, cannabis retail is in its infancy. Many cannabis store owners are going through the motions together, and given this, it is strongly recommended that you develop a strong network of existing retailers for advice and guidance based on their experience. A strength of the cannabis industry to this point has been the willingness of competitors to support one another to help enhance the industry as a whole. Communicating with the regulator to get the most up-to-date information is also key.

  1. Hire experts

You may need additional help to get your retail chain up and running. Hiring experts is not only a great way to save time, but it also strengthens the foundation of your new business. Engaging with professionals will help to endear your business to potential investors as well. This includes hiring anyone from lawyers and architects, to interior designers, to regulatory consultants. 

  1. Find the right insurance provider

This is one of the most important tips to ensure your cannabis retail store is protected from an accidental or unforeseen financial loss. Your insurance plan should be developed with cannabis related risk management in mind. For instance, consider the unique challenges of storing and selling cannabis, protecting against an increased risk of theft, and preventing product spoilage.  

You will need a comprehensive insurance plan for several important benchmarks, such as establishing a lease agreement, bank account, and wholesale purchasing account with the Ontario Cannabis Store (OCS). There are several great cannabis insurance companies out there that can help.

  1. Choose the right Point-Of-Sale provider

Your point-of-sale (POS) system is essentially what will drive your day-to-day operations. Every aspect of your store is in some way tied to your POS system, so choosing the right provider is absolutely critical to your store’s success. Like many business owners, when first implementing your POS software, you may only view your POS system as a mode of transaction. In short, it does a whole lot more than that.

Modern-day POS systems are more than transaction portals. They can also analyze sales, give insights into your business, help you understand consumer habits and behaviours, and track everything from inventory to employee productivity.

  1. Properly leverage your data

If you want to connect with your potential customers, you need to understand who they are. The best way to learn about your customers is by leveraging your sales data effectively. If used correctly, this data represents an ongoing customer survey, covering everything from product preferences, promotion effectiveness, and time-of-day specific shopping trends.

  1. Security installation

Installing a proper security integration solution is critical to maintaining a clean compliance record where physical security is concerned, so you can quickly investigate any incidents. While provincial requirements for security measures are in place to protect customers, employees, and the physical property, one of the main reasons why they are so rigorous is to prevent cannabis products from falling into the hands of minors or the illegal market. 

  1. Create Standard Operating Procedures (SOPs)

In any industry, having clear instructions on how employees should conduct themselves and how the store should operate is incredibly important. Cannabis is an industry in constant flux, and it has a myriad of rules and regulations. Having a roadmap via your SOPs is not only integral — it’s everything. It is absolutely imperative to have a comprehensive set of SOPs that encompass all aspects of the retail operation.

  1. Compliant marketing efforts

In the cannabis industry there are a number of strict regulations around store and product promotion that need to be top of mind for any retail location looking to be fully compliant. Given this, it’s important to focus on aspects such as enhancing personalized customer service, ensuring there is consistent inventory, and fostering new and unique partnerships and education opportunities. These can be leveraged to heighten a customer’s experience and create brand loyalty.

For any cannabis retail store looking for ways to better understand compliance, these tips are a great place to start. Following the rules — or not following them — could be the difference between profit and loss. There are so many opportunities in the cannabis industry right now, and though there are also some unknowns, compliance is one area where there is a clear and defined path to success. 

Lucas McCann

Lucas McCann

Dr. Lucas C. McCann is the Co-Founder and Chief Scientific Officer at CannDelta Inc. where he provides scientific oversight on all projects. A medicinal organic chemist by training, Lucas acquired regulatory knowledge within the Regulatory and Operations Enforcement Branch for Health Products within Health Canada before moving into the private consulting space.

Leveraging his science background he has catapulted himself to the frontlines, where technology, cannabis, and regulation interface. He specializes in chemical synthesis, laboratory processes and building science-forward cannabis companies. Lucas guides his clients through Health Canada’s Cannabis Regulations and the licensing process by working to create compliant business and scientific strategies for start-ups to publicly traded licensed producers.

Lucas holds a Ph.D. in combinatorial chemistry from York University (Toronto), a Masters’ degree in Natural Product Synthetic Chemistry from Laval University (Quebec City) and a B.Sc. from the Faculty of Applied Sciences at Simon Fraser University (Burnaby).

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