A Manitoba pharmacist’s guide to navigating commercial leases

This article first appeared in Communication Journal, a publication of Pharmacists Manitoba.

For many Manitoba pharmacists, a commercial lease is signed at the outset of the business and rarely revisited until renewal, refinancing or sale. Rent and term are often negotiated with a landlord, but other provisions receive less attention. Over time, those clauses can materially affect the stability, compliance and long‑term value of the pharmacy.

Unlike many retail businesses, pharmacies operate from licensed and regulated premises. Lease terms that might be manageable for other businesses can create real risk for pharmacies by affecting patient access, staffing, privacy and compliance under The Pharmaceutical Act, its regulations, and College of Pharmacists of Manitoba practice directions. Certain lease provisions consistently cause issues for pharmacy owners in Manitoba and deserve closer review.

Operating hours and staffing

Operating hours are one lease term that often creates friction with regulatory requirements. In grocery‑anchored or big-box developments, pharmacy leases often require tenants to match the operating hours of the “anchor” tenant. While this may seem reasonable when the lease is signed, problems often arise when the anchor tenant expands its hours.

Patient demand may not increase, but pharmacy staffing costs almost always do. As recruiting challenges for pharmacists and technicians on evenings and weekends is already challenging in many parts of Manitoba, particularly in smaller or rural communities, overlooking mandatory hours of operations can pose serious financial and staffing implications.

Lease operating hours are also tied to regulatory implications. Manitoba regulations require a licensed pharmacist to be present whenever the pharmacy is open and changes to operating hours must be reported to the Registrar. If a pharmacy cannot staff the required hours, the pharmacy may be in breach of both its lease and professional obligations.

Permitted use restrictions and expanding pharmacy services

The permitted use clause defines what activities are allowed on the leased premises. Even where a pharmacist is professionally authorized to provide a service, the lease ultimately governs what may occur in the space.

Many pharmacy leases use narrow language such as “retail pharmacy,” which may not reflect the full scope of modern pharmacy practice. As the pharmacy services continue to expand, overly narrow permitted use clauses can restrict a pharmacy’s growth. Services such as vaccinations, minor ailment prescribing, compounding, clinical consultations, delivery or expanded professional services may not clearly fall within a narrow definition. These issues often surface at renewal or during a sale when a landlord takes the position that expanded services require consent or increased rent.

Layout, reconfiguration and shared space risks

Beyond permitted use, pharmacy owners should be cautious about lease provisions that allow landlord‑driven reconfigurations or shared space arrangements. These provisions are increasingly common, particularly where landlords seek flexibility to redesign layouts or introduce shared clinical concept.

For pharmacies, these changes can raise compliance concerns. The College of Pharmacists Practice Directions impose specific requirements related to dispensary security, restricted access, workflow separation and patient privacy. Notably, the dispensary must be accessible only to authorized personnel, and pharmacies must provide suitable areas for confidential patient counselling.

Landlord‑driven design changes such as shared treatment rooms, reduced private consultation space, or increased public sightlines into professional areas can unintentionally place the pharmacy at risk of non‑compliance. These situations are particularly challenging because if regulatory considerations are not considered at the outset, lease obligations and regulatory responsibilities may not align.

Exclusivity assumptions

Pharmacy exclusivity is another lease term that is often overlooked or missed all together. Many pharmacists assume their lease prevents the landlord from leasing space to another pharmacy or dispensing clinic in the same development. In practice, exclusivity clauses are often absent, narrowly drafted or subject to broad exceptions.

Even where exclusivity exists in a lease, it may permit grocery stores, medical clinics or other tenants to offer “ancillary” or “incidental” pharmacy services. These carve‑outs can allow competing dispensing services to operate nearby, diluting prescription volume and patient traffic. While exclusivity is a contractual issue rather than a regulatory one, increased competition can strain staffing, revenue potential and workflows.

Impact on sale, financing and succession planning

The impact of these lease provisions becomes most apparent when a pharmacy is sold, refinanced, or transferred as part of a succession plan. Commercial leases are closely reviewed by purchasers and lenders. Clauses that allow early termination, forced relocation, mandatory extended hours or restricted services can become hurdles and affect pharmacy value.

Terms that seem manageable in the early years of a pharmacy can become significant obstacles when planning an exit. Addressing these issues well in advance can help preserve value and provide greater certainty for future transactions.

Key takeaways

Commercial leasing for pharmacies involves legal, regulatory and business considerations that are unique to licensed pharmacist professionals and regulated premises. For Manitoba pharmacists, certain key provisions warrant closer attention because they intersect directly with licensing, staffing, patient access and long‑term business value of retail pharmacies.

Reviewing and understanding lease terms before signing, or well in advance of renewal, can help avoid unexpected disruption and position the pharmacy for long‑term success.

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