Sharp Business Plans

Cannabis Laws in Saskatchewan and How it Affects Businesses

Current Legal State Of The Province

Saskatchewan’s Cannabis Framework has the following four major objectives:

  1. Reducing black-market sales
  2. Ensuring that cannabis is not available to young people
  3. Protecting public health and personal health and safety
  4. Keeping people safe on the roads, in public spaces, and in the workplace

Minimum Age: Who Can Legally Access Marijuana in Saskatchewan?

Saskatchewan’s provincial age of consumption for recreational cannabis (weed/pot) is 19 years of age, the same as alcohol.

The federal government has established a maximum public possession amount of 30 grams per legal-aged consumer and Saskatchewan has decided to maintain this limit within the province.

How is Cannabis Accessed? Private/Public Retail Stores

Non-medical (recreational) cannabis in Saskatchewan will be sold by private wholesalers and retailers. The Saskatchewan Liquor and Gaming Authority (SLGA) will be the regulator.

All retailers (dispensaries) are required to have a standalone store with a separate entrance and separate cash registers. These retailers will also be allowed to sell cannabis online.

Retailers will only be able to sell recreational cannabis, cannabis accessories and ancillary items.

Initially, there will be approximately 50 retail (dispensary) licenses in up to 32 Saskatchewan municipalities and First Nation communities. Communities with more than 2,500 people will be allowed to have cannabis retailers.

Some cities may have more than one dispensary:

  • Estevan – 2
  • Lloydminster – 2
  • Moose Jaw – 2
  • North Battleford – 2
  • Prince Albert – 2
  • Regina – 6
  • Saskatoon – 7
  • Swift Current – 2
  • Warman – 2
  • Weyburn – 2
  • Yorkton – 2

Wholesalers/Distributors

SLGA will establish a licensing regime for wholesalers/distributors and retailers, with strict qualifying criteria including criminal background checks and inventory tracking and reporting capabilities. Wholesalers/distributors and retailers will be required to purchase non-medicinal cannabis from a federally licensed producer.

Both wholesaling and retailing of cannabis will be conducted by the private sector and regulated by SLGA. Cannabis retailers will be required to establish a standalone storefront operation, with the option to operate an online store.

Online/ Website Sales

All online sales of non-medical cannabis in Saskatchewan will require proof of age and proof of purchase upon delivery.

Non-Cannabis Products & Edibles

Advertising and promotion of cannabis, accessories, etc. is prohibited except in very limited circumstances (much like tobacco) and cannot be appealing to youth. Additionally, there will be restrictions on the display of cannabis and cannabis accessories at the point of sale.

Bill C-45 originally prohibited the sale of cannabis edibles and concentrates; however, the Bill was amended to include a provision that will provide for the legalization of edibles and concentrates by the one-year anniversary of cannabis legislation.

Licensing

In accordance with cannabis laws in Saskatchewan, no entity can have more than one license in the same community. The individual municipalities and First Nations will be able to choose not to have cannabis Saskatchewan retailers in their community. A year- to a year-and-a -half after legalization, the number of licenses will be reviewed and additional licenses may be allocated.

Dispensaries must be able to track and report on their inventory purchases and sales to ensure that they are only selling merchandise from approved and regulated wholesalers.

Saskatchewan has a two-phase licensing process. The first phase will be to screen license applicants for their financial capacity and their ability to establish a tracking system for their inventory. The second phase will be a lottery of those that pass the first phase.

If you are an entrepreneur interested in how to open a dispensary in Saskatchewan, more details of the licensing process including application criteria, licensing fees timelines, etc., are on the Province’s website and applications for the first set of licenses should be in by April 10, 2018.

Growing Cannabis

The province will adopt the federal minimum standards around home production, including a limit of four cannabis plants grown per household. No decision has been made regarding the federal regulations regarding home cultivation and a decision will be forthcoming in Spring 2018. The Government of Saskatchewan will continue to explore additional rules around where cannabis can be grown, including issues concerning multi-unit residences and rental properties, and how cannabis can be grown.

Additionally, all producers of cannabis (a grow op for example) or cannabis products will, under the proposed Cannabis Act, need to be federally licensed to operate. Following the “coming into force” of the proposed Act, the Government of Canada will establish application processes and criteria for those individuals or entities who wish to become producers of legal cannabis.

A Brief Summary Of Key Legalization Points

  • Minimum age to be defined
  • Wholesalers will be private
  • Retail outlets (Saskatchewan cannabis dispensaries) will be privately owned
  • Retail stores may also sell online
  • Wholesalers and retailers will be privately owned and regulated through the SLGA
  • Cannabis retailers can only sell cannabis, cannabis accessories and ancillary items
  • There will be an initial limit of 60 on the number of dispensaries (retail outlets)

How Cannabis Legislation Affects New Businesses

There seems to be a huge opportunity for wholesalers and retailers with online sales.

Bottom line impact

If you’re a wholesaler, you need to establish deep product lines with great pricing

Retailers are being given pretty reasonable geographic protection. A license could be very valuable.

Online is key. Unless there is a (difficult to enforce) geographical limitation, you should be able to sell products all over the province. A good, well-promoted website could gain enormous competitive advantage.

Under Saskatchewan cannabis law, you may also be able to buy cannabis products directly from federally licensed cannabis sellers (LPs and sales organizations), so you may be able to obtain better pricing and/or exclusive product lines.

Sell accessories and clothing. These items are not provincially or federally regulated, so you can handle this as you want to.

You can set up your business with strong branding or use the branding from the products that you purchase.

Top 5 Common Problems Faced With Cannabis Business Plans

1. Using a Template

As with many other industries, there are many templates available. Some are free, and some you pay for. Reality is that using a template is really going to cost you.

  • Is the template Canadian or American?
  • Does the template assume that you’ll be able to sell all cannabis products? You’ll only be able to sell flower and non-concentrated oil for the first year.
  • Is your business going to be the same as every other business?

Garbage in – garbage out. Your final plan will only be as good as the template. If you are uncertain about the feasibility of your basic concept, how to research the market opportunity, or where to find your startup costs, you need expert help from a business plan consultant. If you don’t know what you are doing with the company, a template will only help you write a plan faster, but can’t make your launch successful or improve your chances of raising funds.

2. What’s The Point?

One of the first questions you should ask before writing a business plan is “Why am I writing this plan?”

  • Are you looking for financing?
  • Do you want to see if the business will actually work?
  • Are you trying to obtain a license?

A successful business plan should always be targeted to your audience. Most business plans that we see are generic. Sure, they follow a format, but it is hard to understand the actual purpose of the plan.

3. Not Focusing on The Competition

  • Playing down the competition
  • “We have no competition”
  • No competitive analysis

Competition is almost always an issue with every business. You want your customers to spend their money with you rather than with your competition. Don’t dismiss your competitors. Unless you really do “know it all,” you have to do your market research to write a good business plan. Check out the competition. What’s their niche? Why do their customers choose them? How do you know that your competition won’t get in your way? Even if you believe that you have a unique business, there will still be other businesses competing for your customers’ money.

4. Inadequate Market Research

  • How large is the total market for your products?
  • What share of the market can you expect?
  • How do your products and service compare to the competition?
  • How does your pricing compare to your competition?

Good market research can help you define and refine your value proposition. Not dissimilar to your USP (Unique Selling Proposition) your value proposition answers the question: What is the compelling reason for customers to buy your product? This question can also be rephrased as: Why should a customer choose your product/service over every other option available to them?

5. Unrealistic Financial Projections

  • Financials do not make sense
  • A “hockey stick” growth curve
  • No cash flow or break-even analysis
  • Assumptions not listed
  • Essential expenses omitted

Let’s face it. Opening a business is going to cost you money. Not just to open and equip the store and buy inventory, but also to pay the rent, meet the payroll and take care of operating expenses until you make decent profits. You’d better have a solid Financial Model so that you KNOW “what it’s going to take and what it’s going to make.”

Summary of Article

Wholesale Cannabis

  • Wholesaling will be run by private companies, regulated by the SLGA
  • Federally licensed cannabis sales organizations may also be permitted
  • Licensed Producers may be able to sell directly to retailers

Online Cannabis Sales

  • Retailers with a storefront will be able to set up online sales

Dispensary/Retail Cannabis Outlets

  • Privately owned
  • Regulated by the SLGA
  • Can only sell cannabis and related products
  • Initially, numbers will be limited to 60

Saskatchewan private cannabis retailers have a great once-in-a-lifetime opportunity. If you can get a license, you’ll be able to open a dispensary, and that looks like you’ll be able to make a lot of money.

How Sharp Business Plans can help you

  1. We are business plan experts. We’ve been writing business plans for over 30 years and helped hundreds of people realize their dreams of owning and operating a successful business.
  2. All of our business plans are reviewed by a professional accountant to make sure that the financial statements and financial information make sense.
  3. We are experts at writing business plans for the cannabis industry in Canada, Australia and the U.S.
  4. We have written over 40 business plans for licensed producers and potential licensed producers under the ACMPR. Some of our clients have already received their licenses.
  5. We understand the Canadian provincial regulations have not yet been finalized, so we can prepare business plans targeting the politicians that will help smooth the way for your license.

If you have any questions about Saskatchewan’s cannabis private retail licensing, or Access to Cannabis for Medical Purposes Regulations (ACMPR) or want more information on how we can help prepare a cannabis business plan for you, call us toll-free at +1 (800) 661-9842 and contact us today for a free consultation.