When the Cannabis Act—officially known as Bill C-45—was passed, the market in Canada for cannabis was projected to be valued at $9.2 billion by 2025. Since then Ontario has gone through a number of changes with respect to cannabis retail business licenses, among other things.
In late 2019, it was announced that there were new rules coming into effect in January 2020. The changes that have gone into effect include:
- 1) The removal of the cap on the number cannabis retailers the province will allow.
- 2) The end to the lottery system used for awarding licenses.
According to CBC, the AGCO will “likely issue dozens of new retail licenses across Ontario this spring.” Although you must pay careful attention to the regulations and reporting requirements, financial planning is still a must if you wish to break into this industry. Keep reading to learn more.
Know Your Market
If you are interested in cannabis industry training, you will have the opportunity to learn about retail management, packaging, and other important topics. Furthermore, it’s important to understand the market into which you plan to enter with a cannabis retail business. To get to know your market, you need to determine:
- Who your target customers are
- Who your competitors are
- Sector projections
- How provincial regulations and municipal by-laws will affect the market
Get ready to do your research into this industry
These determinations will also extend to doing a SWOT Analysis, because you need to assess your business’s Strengths, Weaknesses, Opportunities, and Threats. A market overview is crucial to financial planning because this will inform how you make decisions about your business.
Financial Projections Before Your AGCO Cannabis Application
Retailers who plan to submit an AGCO cannabis application for a license should have financial projections ready. What makes up financial projections?
- Profit and loss forecast
- Budgeted expenses
- Cash flow statement
- Balance sheet and funding analysis
How will you grow your business?
Another recommendation is to determine how much working capital is needed for inventory. Financial projections may be challenging to do because the industry is new and there is a lack of historical data. However, the knowledge you get from industry training along with consultation with a financial planner can guide you to fill in the gaps.
Learn How to Write a Complete Business Plan
A market overview and financial projections are ultimately just two components of a business plan. Whether you require investors for start-up capital or not, a business plan is one of the keys to prudent financial planning. The following elements are necessary:
- Executive Summary
- Marketing and Sales Plan
- Operational Plan
- Team Summary
- Financial Plan and Projections
As with other types of businesses, cannabis business financial planning will be all about details
When you have your plans laid out and you establish your start-up budget, the projections will become measurement tools against which you can measure the progression of your business. As you run your business, you can also adjust your plan. The cannabis market is new and regulations may change again, so it will be important to be flexible and have contingency plans. Finally, it will also be helpful to have legal council to keep up to date with regulations and codes, along with proper insurance.
Do you want to know more about AGCO cannabis industry training?
Visit the Academy of Applied Pharmaceutical Sciences today!