This empty storefront could become one of London's first legal dispensaries
Despite silence from governments on official plans, Indiva says it will open 10 stores anyway
It's just an empty storefront now, but Indiva, London's first medical marijuana producer, hopes it might one day become one of the first legal pot dispensaries in the province, once private retail pot sales are expected to begin next April.
The location at 879 Wellington Rd. is among 10 legal dispensaries Indiva hopes to have in place by next year, despite the fact the province and many municipal governments have yet to draw up any official plans on how private retail pot sales will be governed.
Ontario's Progressive Conservative government announced in August the province would handle online sales as early as next month when federal legislation takes effect, while retail storefront sales would be handled by the private sector.
What's still up in the air however, are issues around how retail sales are controlled, where the stores can be located and whether some Ontario communities might decide to opt out altogether following this fall's municipal elections.
Indiva to press forward despite risks
"What we're trying to do is position ourselves so that we are ready day one," he said.
"That we've got everything lined up and we're ready to go," he added.
Smutylo said the company has already secured locations in London and Ottawa and is currently eyeing additional storefront space in Toronto, Kitchener-Waterloo and Windsor.
"We're looking to open multiple in Toronto, possibly two or three in Ottawa and at least one, maybe more in London," he said, noting the company has already secured a lease for a potential dispensary in a commercial plaza on Wellington Road South.
No clear rules on private pot sales
The trouble is many cities, including London, have yet to draw up the rules about where legal pot can be sold within city limits, or how close dispensaries can operate in the proximity of schools, day cares, hospitals and other institutions.
Marijuana production can be zoned in London under the current city bylaws and producers the same way as manufacturers of pharmaceuticals or medical equipment, but only if the producer has a valid Health Canada licence.
The city currently has no zoning regulations for marijuana dispensaries.
That's expected to change after this fall's municipal elections, when the province hopes to enter a consultation process with cities, Indigenous groups, public health agencies and business groups.
Smutylo said Indiva has tried its best to anticipate what's coming in terms of where a legal dispensary can set up shop.
'Yeah, it's a risk'
"We're in the game for the longer term and we want to have desirable locations. They're not easy to come by," he said. "Not every community wants a cannabis dispensary in its midst, so we're trying to identify locations that are outside of certain proximity to schools and hospitals and secure them so we're ready to go."
What makes it even more complicated is the fact that communities have been given a "one-time" option by the province to opt out altogether and forbid private recreational cannabis sales within city limits.
Smutylo is confident that, if it happens, it won't be a problem for long.
"If it happens, it's likely to be a short term thing," he said. "When the cities get a taste of the tax revenue and the jobs then they'll be more receptive, but yeah, it's a risk."
It's a risk Smutylo is willing to gamble on, paying rent in some cases on what will be empty commercial space until Ontario can clearly define the rules around private pot sales.
"It's not a lot different from what we've done in London with our production facility," he said. "We've been paying rent there since 2013 and haven't sold any product yet."
"It's not a business for the faint of heart or the light of wallet. We want to be there and we have to take chances and be proactive in order to be there early and be ready to go when the market opens."
Some companies holding back
Still that kind of risk isn't the kind all cannabis companies are willing to take, especially when the rules in Ontario have not clearly taken shape.
"The regulations and requirements really haven't been released yet," said the CEO of Strathroy's Eve & Co. Incorporated, Melinda Rombouts. "We're holding back on that until we can really see what happens."
Rombouts said her company is in the midst of a vast expansion that will bring it up to one million square feet of production space. She said it's going to focus on production and leave the retailing to the retailers.
"We think that's probably the best way for us to enter the retail side," she said. "Really just work with the people who really know what they're doing."