Prime Minister Justin Trudeau says recreational cannabis will become legal in Canada on October 17th, 2018. Ontario is delaying the launch of private cannabis sales in bricks-and-mortar stores until April 2019. Alberta and Saskatchewan are approving privately run stores; British Columbia is considering a more flexible system of outlets, including “government liquor stores, private liquor stores or other variations of retail operations”; New Brunswick and Nova Scotia plan to have cannabis sold via provincially operated stores; Manitoba also plans to handle online sales using a public system but would allow retail stores to be operated by the private sector; Quebec plans to sell through its government-run alcohol agency. Legal sales are expected to reach $4.9 billion by 2022, according to a report published Monday by Arcview Market Research and BDS Analytics.

Profit margins in the retail side of the cannabis industry are more modest than for other types of cannabis business due in part to the fact that average startup costs for retailers are higher than other sectors of the cannabis business. Median operational costs for retailers are also the highest in the industry, at around $600,000 annually.

Luxury jewelry - 3017$
High-End athletic wear - 1936$
Cannabis shop - 1143$
Boutique shoe store - 887$
Pharmacy - 241$

Cannabis retail business conditions differ from province to province and if you have planned to set up your own cannabis store business, then you must comply with the laws of your particular province. Licensing requirements will also depend on the type of business you wish to start. Someone who operates a grow house will require a completely different type of license than someone who owns a cannabis store.


The initial capital to start a cannabis retail business depends on many factors, including location, premises size, your goals and objectives. For example, your goal is to reach the annual revenue more than $1 mln or under $150,000 is also appropriate. For these two goals there will be different initial CAPEX and OPEX:

 $150,000 Scenario

  • $7,000 Application fee (depends on province, one-time application and annual license fees typically range anywhere from $7,000 to $50,000 for stores and tend to be much higher for cultivation licenses)
  • $25,000 for six months rent
  • $30,000 for a space improvements
  • Deals with growers for stores it will be approximately 33-40%
  • $500 for display cases
  • $150 office supplies
  • $750 for security system
  • $175 for a sign
  • $1,000 for product bottles and $250 for jars to store the products
  • $150 on labels (all white)
  • plus salaries for manager and guard

= approximately $65,000 start-up expenses

$1 mln Scenario

  • $50,000 Legal Fees & Licensing & Insurances
  • $250,000 Building renting (includes security deposit)
  • $70,000 Inventory, packaging supplies
  • $2,500 Website design and development, hosting
  • $70,000 Marketing Campaign
  • $100,000 Space improvements including finishing/painting, kitchen, office space, bathrooms, etc.
  • $35,000 Security system including multiple camera feeds and metal/weapons detectors
  • $70,000 Furniture, Display Counters, Refrigerators, Freezers, Multiple POS/ Cash Registers, Registration Computer, Commercial Label Printer, Storage Hardware and Shelving, etc.
  • $15,000 Computer Software (Accounting Software, Payroll Software, CRM Software, Microsoft Office, QuickBooks Pro, etc.)
  • plus salaries for director, managers and guards

= approximately $800,000-$1,000,000 start-up expenses

Average sales per square foot for a cannabis shop is $2,000. More established operations boast 40-50% profit margins, while newer shops may only see 20% due to their lack of strategic partnerships and vendor relations.

Sample of a revenue model for a cannabis shop:
Revenue = $1,000,000 (100%)
-Direct Costs = $350,000 (35% if you mix own product line and vendors, 55% if case of only vendors product line)
Gross Profit = $650,000 (65%)
– Operating Expenses = $300,000 (30%)
Operating Income = $350,000 (35%)

Table of Contents

  • Project Scope

  • Global Market

  • Canadian Market

  • Start-up Summary

  • Financial Projections

  • Mission/Vision/Goal

  • Objectives 

  • Products & Services 

  • Key Customers

  • Global Market Overview

  • Canadian Market

  • Province Cannabis Law

  • Competition

  • Competitive Advantages

  • Cannabis Sector Projections and Perspectives

  • SWOT Analyses

  • Online Advertising Obstacles

  • Alternative Online Advertising Options

  • Marketing Plan

  • Cannabis Directories

  • Launching Strategy

  • Sales Forecast 

  • Location/Facilities

  • Equipment

  • Project Plan

  • Physical Security Plan

  • Video Surveillance

  • Packaging and Labeling

  • Tracking Solution

  • Profit & Loss Forecast

  • Cash Flow Statement

  • Balance Sheet

  • Main Ratios

  • Funding Analyses

  • Income Statements, monthly

  • Cash Flow Statements, monthly

  • Statistics

Should you have any questions, please do not hesitate to contact us.

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