come summer there might be a brand new
industry in Canadian business cannabis
it's not often that something like this
takes place new legislation that
transforms our business landscape and
gives all kinds of Canadian companies
the runway to become global leaders but
as the government treads on unchartered
territory how can potential pot
retailers successfully set up shops
amidst all the uncertainty to discuss
this we're joined by Monica Chadha she
is National cannabis leader at ey Canada
so now Monica you've put out a whole
paper advising businesses on the best
way to approach opening a retail spot
what made you think that businesses
needed to hear this well being a
retailer in general in today's day and
age is a challenge and when you add to
that the regulatory scrutiny here the
nason C of this particular industry and
the uncertainty it makes it that much
more challenging so there was a need to
kind of collate together information
that could be given to retailers who are
looking to enter this space so a market
entry framework or strategy or the
tenants of that entry if you will okay
so now there already are going to be
quite a few big players in terms of
cannabis retailing right I mean I'm
thinking in Ontario the LCBO is running
it right and a lot of eastern provinces
the Liquor Control board's are going to
basically become the marijuana store and
then out west there's a number of
private companies like liquor barn and
Liquor Mart are going to be selling it
so they're big companies that presumably
have their own departments that would be
looking into all of this do they need to
know more from you as well absolutely so
there are each province is completely
different in terms of what the structure
the retail environment will look like
you've already mentioned here in Ontario
there's an offshoot of the LCBO with the
Ontario cannabis stores although LCBO
does exist and there may be
infrastructure and there may be elements
that they could leverage there is still
a need to truly understand the nuances
that are specific to this particular
industry
and of the net new retailers that are
coming into this space you know
certainly there is some direction that's
required in terms of how do they
strategically enter this space so are
there a number of like I guess what
you'd call like a mom-and-pop type of
operation like small independents that
are saying I want to be you know the
cannabis store in our neighborhood you
can expect to see that for those
provinces that are allowing private
companies or private individuals to come
in I think you're gonna see a
conglomerate or cluster of a number of
mom-and-pop shops or onesie twosie shops
that will be coupled with probably LPS
who have the bandwidth to potentially 11
limited partnerships you mean so
licensed produced licensed produce to
potentially open up multiple stores and
then I think you're gonna see some
interesting partnerships happen so
you're gonna have a good hybrid in
cross-section and I think of those
mom-and-pop shops a number of them are
going to try to position themselves to
for longevity and stability by
potentially being a niche player and
what do you think is the biggest
challenge facing these people the major
challenge I see here is the the level of
uncertainty in this industry and an
ambiguity uncertainty about what exactly
so there's still uncertainty about the
regulatory environment there's
uncertainty with respect to consumer
preferences and consumer demand
you know just the inventory levels that
they have to keep being a nascent
industry we have no baseline here and no
foundation so you know we don't know how
many consumers existing consumers in the
illicit market are going to convert over
we don't know what the adoption rate is
going to be of net new consumers right
so how you go about even stock in your
shelves and how much inventory to have
that's a lot of uncertainty absolutely
any tough and have a lot of guts to jump
into that business although I suppose
they're thinking hey it's gonna be a
moneymaker it's gonna be a moneymaker
and and you're you know you're you're
you're part of history here right so
they're shaping history they're paving
the path forward for the future so very
exciting times and and certainly
individuals who are interested in
entering this space are are interested
in being a part of that history all
right thank you so much for being
Thank You Monica Chadha is the National
cannabis leader at ey Canada