Canadian recreational market may breed cannabis tourism business opportunities

Already big business in legalized areas of the U.S., marijuana tourism could become one of the more lucrative ancillary business sectors in Canada once recreational sales begin Oct. 17.

From visits to grow facilities, dispensaries and glass-blowing studios – often aboard luxury limos or rocking party buses – to social clubs and special events, a range of activities are popping up exclusively targeting marijuana aficionados and the cannabis curious.

Here are some tips and techniques for Canadian entrepreneurs who want to follow a path to marijuana tourism success:

Treat it like a business 

As with any new venture, entrepreneurs need to do their due diligence, including researching:

  • The idea’s viability
  • What the law says
  • Potential markets
  • Competitors
  • Suppliers
  • Partners

After reading an article that chronicled how a single dad in Colorado netted more than a million dollars from his cannabis tour company, United Kingdom-based Matt Cronin was intrigued.

Cronin then read another article about Airbnb’s “experience” offerings, which did not include anything cannabis-related but spurred an idea: Combine cannabis-friendly tours with unique experiences and operate them through local hosts.

“This had to be the model if I was (going) to build and run it remotely,” said Cronin, who advises other entrepreneurs considering entering the realm to “know travel, cannabis and technology very well.”

Cronin and his brother in-law in Canada, Nic Manko, founded Canada High Tours last year. The venture now includes Cronin, Manko and 60 cannabis-friendly “hosts.”

Tour matters as much as the plant

Shaman Ferraro, CEO and founder of Prince Edward Island’s Gocanna, a company that connects individuals with legal, licensed tourism operators, believes the most successful companies will be those that emphasize the tourism part of their business, rather than the marijuana part.

“Cannabis consumers enjoy the same things that the average tourist enjoys – seeing the sights, mental stimulation, comedy shows, magic shows, live music,” Ferraro said.

“It’s not about getting people high; it’s about adding value to people who choose to enjoy cannabis. You can be a cannabis tourism company (in which) people can’t consume or buy cannabis.”

Learn from where it’s already been done

Greg Wilson – Canadian board member of Las Vegas’ Planet 13 Holdings, which is building the world’s largest cannabis entertainment complex – believes Canadian entrepreneurs can learn a lot from states like Colorado, which legalized recreational marijuana in 2014.

“You might not be able to act today on some of (their) ideas, but you can certainly start to build a library of some of these ideas, study the effects, the results, to try and be ahead of the game when the rules do allow,” he said.

Wilson pointed to potential parallels between ski resort areas like Aspen and Vail in Colorado and Whistler and Banff in Canada.

“In Vail and Aspen, we’re seeing major events where celebrity chefs are creating five-course meals with each course using cannabis in an infused way,” Wilson said. That could easily be adapted for Canadian resort areas.

Advertise without breaking the law

With stringent laws around where and how cannabis companies can advertise starting Oct. 17, entrepreneurs need to be creative – and careful.

Mitchell Osak, managing director at the Toronto office of consulting firm Grant Thornton, says there are legal ways business owners can advertise – via social media, community forums and word of mouth, taking care to not promote consumption.

Then there are the illegal ways – creating websites and engaging in “guerilla marketing” that promotes use.

“You are not allowed to buy Google search words; that’s considered digital marketing,” Osak said. “You’re not allowed to have a page on TripAdvisor or on Airbnb.”

He says some entrepreneurs will advertise in foreign jurisdictions, where it’s allowed and where their business will come from, like Colorado.

Another option: Leave the word “cannabis” off your marketing plan altogether.

“If your business doesn’t sell or produce the product, you don’t really need to promote cannabis to be a cannabis tourism company,” Ferraro said. “You don’t need to say ‘cannabis-friendly magic show.’

“You just need to know who your target market is and market (to it) like you do with any other product. And there are no restrictions on that.”

Watch for legal changes

“Laws are changing weekly and the legal landscape is still incomplete at the provincial and municipality level,” Cronin said.

“So, you need to keep a close ear to the ground at all times in this respect so you don’t fall foul come Oct. 17.”

Cannabis tourism is no different than any other tourist business, Osak said.

But it’s important to understand the rules at all levels – federal, provincial and municipal – by studying Health Canada’s website or consulting firms like his.

Mistakes to avoid

“At the end of the day, this is still the hospitality industry,” Osak said, so lessons can be learned from other aspects of that industry.

Here are some common mistakes, which can be easily avoided:

  • Not adhering to basic expectations. “Not all cannabis tourists are 18-year-old stoners, so doing the basic business blocking and tackling, having the right price, rating transportation, differentiating in the marketplace, etc.,” is important, Osak said.
  • Not being different. This market could get crowded very quickly, Cronin said. “If you have a niche idea that’s not yet served, or not served very well, just go for it.”
  • Ignoring the experience. “Cannabis still has a bit of that giggly factor to it,” Osak said. “Professionalizing the industry is going to be really important.” Understand what your customers want – and make sure you deliver.

“There’s a lot of synergy to be capitalized on (with) the existing hospitality tourism industry,” Ferraro said. “I think anybody who looks at it now and thinks they missed the boat is completely wrong.

“Right now, the door is about to open and everybody has a huge opportunity before them.”

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One comment on “Canadian recreational market may breed cannabis tourism business opportunities
  1. Curtis Reiss on

    please advise and reply reference ACBFF article on 21Jun18. Article stated that ACBFF will shuffle all US money from American investors into one of their American companies. I have not found any other articles ref. this Schwab knew nothing about this. at this point ACBFF has fallen dramatically

    Reply

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