Wondering how to start an online dispensary in Canada? Since Canada legalized recreational cannabis in 2018, sales of this once forbidden flower are on fire. By most estimates, Canada’s legal cannabis market should hit $8.6 billion by 2026.
Despite these relaxed laws and “sky-high” valuations, some Canadian entrepreneurs aren’t keen on opening a traditional dispensary. Novice cannapreneurs only have so much capital to put into building a physical pot shop.
Brick-and-mortar stores come with many associated costs, such as employee benefits and security systems. On top of all these expenses, dispensary managers have to fret over dozens of regulations and local zoning laws.
Creating an online-only dispensary in Canada may be more logical for people who want to break into the bud business. Since these weed shops are virtual, they don’t come with all the requirements of physical dispensaries. Plus, a well-run online dispensary could build a loyal following before opening a retail location.
Want To Open An Online Cannabis Dispensary In Canada? Consider These Factors
According to our friends over at Cannasweets.co, a leading online dispensary in Canada, setting up an online cannabis shop may be “easier” than opening a physical dispensary, there are many complex rules in Canada’s cannabis industry. Entrepreneurs must consider dozens of factors while building their weed website’s business plan.
Compliance First — Do You Meet Canada’s Cannabis Statutes?
Yes, cannabis is legal in Canada, but that doesn’t mean you could treat this drug like any other product. Just like tobacco or liquor, regulators hold cannabis to a higher standard—which means there are more restrictions to bear in mind. Also, each Canadian province has unique regulations surrounding the use, cultivation, and sale of this drug.
For example, most provinces require cannabis users to be 19, but Québec only allows people over 21 to use cannabis. Also, only Manitoba and Saskatchewan allow private companies to sell cannabis online. All other provinces allow government-operated online cannabis sales.
The first step in developing an e-dispensary is to review the current federal and local laws. The best place to start researching weed legality is on Health Canada’s cannabis portal. Here you’ll find resources to apply for federal cannabis licenses and set up an account with the national Cannabis Tracking and Licensing System.
After learning Canada’s federal regulations on cannabis sales, carefully review your province’s cannabis-related laws. While you could find info on your province’s laws on Health Canada, you’ll probably need to interact with the provincial office that handles liquor and cannabis sales.
Prioritize Hi-Tech Age-Verification Software
Compliant age verification is one of the trickiest things about operating an online-only dispensary. Since customers aren’t literally in a store, how could online vendors trust buyers are of legal age? Also, how could you track whether each customer exceeds their purchasing limits?
Interestingly, there are third-party software solutions now available for this very issue. These systems often require users to scan a government-issued ID before making a purchase.
Online-only retailers must research these cannabis-specific verification systems to comply with Canada’s standards. While you’re reviewing different options, try to envision how they will alter your customer’s experience. Although compliance always comes first, it’s essential to integrate this process as seamlessly as possible.
Is Your Cannabis Packaging Up To Canada’s Code?
Arguably, packaging is as important as the product, especially when dealing with cannabis. Not only will good packaging entice customers, there are numerous restrictions over what you can put into your cannabis branding.
All Canadian provinces require cannabis packaging to follow standards similar to the tobacco industry. This means you need to verify every package has a “Warning” label with the cannabis symbol. Each cannabis product should also be in plain, child-proof containers with zero medical claims.
You also need to ensure there’s high-quality ingredients info on your packaging. Legal cannabis products should have official cannabinoid percentages and precise info on where these products came from. These trackable details are essential to make your cannabis business legitimate.
Get Creative With Online Cannabis Advertising
Just like packaging, cannabis businesses face increased hurdles in the realm of advertising. Online retailers need to get their name out there, but they have to be extra careful about how they do it.
Like other cigarette manufacturers, online dispensaries can’t make direct health claims or market their offerings towards children. To have the best effect, cannabis dispensaries should consider launching ads on cannabis-specific sites that already have age restrictions. Enlisting the help of an experienced cannabis writer can also help!
Many high-profile websites like Leafly and WeedMaps offer integrations with local dispensaries. New online retailers may want to leverage the popularity of these sites to legally spread awareness of their brand.
Compete, But Be Compliant! — Consider Consulting A Pot Pro Before Launching An Online Dispensary
Cannabis is legal in Canada, but the weed industry is still going through some “growing pains.” This is especially evident in the many “grey areas” surrounding online-only cannabis business.
While online cannabis dispensaries are legal, not all provinces have specific laws governing these businesses. Issues such as online age verification and delivery requirements also pose unique challenges to anyone entering this market.
New entrepreneurs may want to speak with a Canada-based cannabis law firm to ensure they have the proper documentation to operate in a given province. Online cannabis retailers also have to triple-check they’re promoting their business in a smart, compliant manner.
It may not be easy to open an online cannabis shop, but it’s a fantastic way for small entrepreneurs to enter the MMJ market. By getting in early, new brands could establish a solid presence in Canada’s lucrative dispensary industry.
Zach is the founder of HempCBDExchange.com. Amateur writer. Social media ninja. Travelaholic. Passionate about all things cannabis & hemp.