The Can’s and Cannot’s of Cannabis Retail

Cannabis became legal in Canada in 2018, and with the new legalization came different laws and regulations for each province and territory. As of June 1, 2020, Manitobans were able to apply for a licence(s) to open their own cannabis retail stores. Although some of these new applicants had robust retail experience, many new candidates were new to the world of retail all together. As a result, landlords have been presented with a mixed bag of prospective cannabis tenants over the last year and a half.

Here are a few things to consider when introducing a cannabis retailer into any commercial property:

  • Familiarize yourself with the provincial guidelines.
    Since cannabis businesses are generally new to the marketplace, parties must be proactive in understanding the respective provincial rules and regulations, in concert with the civic code requirements that will ultimately allow a tenant to obtain an occupancy permit and open their doors for business. One example is that according to the Liquor, Gaming and Cannabis Authority of Manitoba (LGCA), all cannabis retailers must have “controlled access”. This means cannabis products cannot be seen from the outside of the premises and people under the age of 19 are prohibited from entering.

  • Consider co-tenants when selecting a space.
    Size requirements, branding, and operational experience are just a few of the key factors that can differentiate prospective cannabis retailers from one another. Many landlords focus on specifically curating their tenant mix in order to meet the needs of the trade area the property services. In this regard, consideration is given to the specific tenant roster to ensure synergies are provided throughout the property, help all businesses to succeed, and engage the consumer with a convent shopping experience.

  •  Anticipate changes with the rules and regulations.
    With cannabis licences being relatively new, it’s possible for new rules and regulations come into effect. Stay connected with your provincial licensing body in order to monitor how any future changes may affect your tenants.

These are just a few things to consider before jumping into the cannabis industry. Do your research, consult your provincial regulatory body, and speak to a qualified commercial real estate broker that understands the cannabis category and specializes in retail.

While cannabis is a new retail sub-sector, new stores are blazing throughout the country, and we believe that they’re here to stay.

Sandy G. Shindleman, CCIM, SIOR, CRE, FRICS


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