Overview of Cannabis Retail Across Canada
It’s been a few years since the first legal cannabis retail store opened its doors in Canada. Upon legalization of cannabis, each province and territory established its own unique regulatory framework to manage the distribution and sale of recreational cannabis within their jurisdiction. As a result, each province and territory adopted either a government-run retail model, a privately-run model, or a hybrid of the two, engaging in cannabis retail through both brick-and-mortar and online stores.
Early on, many provinces and territories placed caps on the number of retail store licences issued in an attempt to gain an understanding of consumer demand and waiting for cannabis supply to stabilize. As the industry established itself and the market developed, Canadians’ access to cannabis retailers increased. While online cannabis retail ensured access to all Canadians regardless of proximity to a physical store, accessibility continues to improve as more stores open across the country.
Cannabis is available through online retail in every province and territory, with only Manitoba and Saskatchewan allowing online sales via the private retail model.
A variety of factors, including Canadian’s access to cannabis stores, contribute to the differences between regions in total and per capita cannabis store sales. Some factors which effected access to cannabis in a given region included:
- the administrative and operational steps required to establish a cannabis retail store (which may affect the pace at which new outlets are able to open for business);
- the immediate or staggered entry of retail operations over the course of the year;
- competition from illegal markets;
- the density and distribution of the population and of stores in a given region;
- demographic and income factors;
- disruptions in the supply chain;
- differences in the regulatory approaches pursued by the regional governments.
There are a lot of new things going on in the cannabis retail space, which will benefit both the retailer and the consumer:
- Growth in Number of Retail Stores – As an example, the cannabis market in Ontario has gone through a significant retail sprawl, growing from the 25 locations in the first year of legalization to more than 1,000 locations to date. The same thing has happened across the country, with just a few stores to start and now several locations popping up in high population areas.
- Flexibilities and Flow-Through Processes – Now that cannabis retail has been established in Canada for a few years, provinces are streamlining processes and allowing retailers more flexibility when it comes to running their business. For example, the Ontario Cannabis Store (OCS) announced to authorized cannabis retailers its new plan to allow licensed producers of cannabis to sell directly to cannabis retailers in Ontario which could help expedite the process of bringing new products to market.
- Farmgate Cannabis – 2021 marked the opportunity for federally licensed cannabis cultivators or processors to sell cannabis products on site with a farmgate cannabis retail store. Ontario is the first province to roll out farmgate cannabis stores, however a few others are following suit, such as British Columbia and New Brunswick. The farmgate cannabis model is a great opportunity for licensed producers to create jobs in their community, increase revenues and educate consumers on the production process and work that goes into creating a high-quality product.
- New Cannabis Products – Cannabis retail stores are expanding their cannabis product offerings, based on what’s being manufactured by licensed producers. Cannabis retail stores started out with basic offerings such as dried flower, oils and capsules to now offering a variety of different cannabis products such as cannabis edibles (infused beverages, baked goods, confectionaries, etc.), cannabis topicals (infused lotions/creams, bath bombs, etc.) and extracts (hash, rosin, resin, keif, shatter/wax, etc.).
How We Can Help?
When it comes to cannabis retail in Canada, Cannabis License Experts offer support from day one of starting your business, including strategic planning, business plan preparation, licence application submission, SOPs, and more. Contact us today to learn how we can help your business grow and succeed!