Lesson Learned: Steven Fry’s Perspective on Venturing into Retail Cannabis
When seeking a comprehensive narrative on the past, present, and future of Ontario’s young cannabis industry, there’s no better voice than that of Steven Fry.
As the president and Co-founder of Sessions Cannabis and one of the first entrepreneurs to snag a license in round one of the Ontario cannabis lottery, Steven has seen and experienced the highs and lows of the industry like no other.
With an industry projecting Canadian revenues of over $3.16 billion in 2020, it’s not surprising that corporate leaders have been undeniably aggressive in their emergence. Having experienced a growing competitive landscape in the industry, Steven prevailed with a clear picture on how to operate a franchise in the cannabis retail industry. He quickly understood that growth and prosperity are direct products of mutually assured success between the franchiser and franchisee.
If there is any indication of this newly accrued knowledge, it would be Sessions Cannabis. With the hugely impressive opening of Sessions Cannabis Collingwood, we can only anticipate that the upcoming Toronto, Hamilton, and Cambridge locations will burst onto the scene, mirroring the success realized by the first location. Sessions Collingwood was the first dispensary to open in Simcoe county, targeting an undoubtedly eager community. Based off the significant turnout of excited patrons on the day of the launch, it’s clear that the opening was received extraordinarily well. “We were very warmly embraced by members of Simcoe County. The community has shown a lot of support and sales have been great,” Steven proudly accounts. A visit from the mayor, major news outlets, radio stations, and the distribution of over a thousand swag bags only brushes the surface of how highly anticipated the opening of the store was.
Having partnered on over 125 cannabis retail store launches across Canada and the U.S, Venture Sourcing Group understands the various underpinnings of what contributes to a successful opening. One of the most important decisions to consider when thinking of entering the cannabis retail space is determining whether you want to be a part of an existing franchise, or if developing an entirely new brand is the way to go. Having ventured down both paths, Steven makes compelling arguments for both. The benefits of buying into an established franchise are unequivocally appealing. It takes a lot of the grunt work out of the process by eliminating some of the due diligence required. “You’re entering a partnership that already has an established market share, supply chain channels, existing customer relationships, and has met government standards,” notes Fry.
In addition to the support of the established brand, it is imperative to be backed by trustworthy, transparent people. Individuals like Steven, who have experienced the challenges from the very beginning are equipped with the knowledge and foresight to see potential hurdles both on a business operation and industry standpoint. Taking the franchising route mitigates much of the risk involved in entering cannabis retail, franchisees can jump directly into putting in the work to be the driving force that catapults the brand into a greater success. As Steven reflects on his past, he revels on his lessons learned, “My whole business model is predicated on all the mistakes I made in partnering.” Any growing business will face obstacles, and owning a franchise is no different. Steven is wary of entering relationships that are not firmly grounded in trust and mutual benefit. For Steven, and other prospective cannabis retail entrepreneurs, there was no definitive playbook to ensure a fair playing field for licence holders. He does not however discount the success of his current partnership with Sessions’ co-founder Darryl Allen, and strongly values the lessons learned and “applying those to new stores and new relationships.”
Still, in a newer, advanced stage of legal cannabis, potential retailers are not completely immune from the possibility of corporate maneuvering. Steven mentioned instances in which a franchise was charging royalties and monthly fees to franchisees that equated to a significant amount of top line revenue, with no downside protection and all the weight to bear. On the contrary, Sessions offers a much more competitive fee structure and are open to providing franchisees downside protection that ensures that if the sales of a store dip under $2 million a year, they decrease the fee. If things were to derail under a structure like Steven alluded to, the retailer would take the brunt of the damage.
Thus, when an aspiring cannabis retailer is faced with a fork in the road and must decide whether to become a franchisee or their own independent brand, they must undertake some hard-nosed calculations. The roll-out of the legal cannabis business across North America has shown us that it’s not all about revenue. It’s about getting it right!
Whether it’s being a part of a bigger picture or being in control of your own cannabis retail destiny. If Steven Fry has taught us anything, it’s that both routes promise you a notable mention in the history books of this bold, beautiful, budding industry.