There is no question that the pandemic has caused havoc for all retailers across the country. Constantly changing regulations, a lack of clarity on pandemic retail rules, and continued competition from the legacy market have caused cannabis retailers and their patrons’ confusion, yet these factors spurred innovation to adapt and pivot to new permanent and temporary rules.
Embracing the Private Sector
As we look at the landscape of cannabis retail across the country, we can easily see that there is momentum, and in most of the larger provinces, we see an embrace of private sector operators, which has brought differentiation and competition to an industry that is still in its infancy.
In the early days of cannabis retail, all eyes looked to Alberta for the most permissive rules for private operators. Retailers have responded to this regulatory environment as expected with the province currently boasting a country-leading store count of more than 550 stores. This has prompted many to suggest that there is over-saturation for the province of 4.3 million people, which is only half the population of the Greater Toronto and Hamilton Area in Ontario (GTHA).
Changing Regulatory Landscape
Ontario will be quickly nipping at Alberta’s heels on store count however. When the business-friendly Progressive Conservative government under Premier Rob Ford took over from the Ontario Liberals, he quickly decided to have a private-sector retail model and shelved the previous government’s plans for 40 government-run stores. Of course, these last-minute changes caused their own problems with limited lotteries and a delay in openings. The province’s regulatory body now processes and licenses 40 new stores a month, an approach that is paying dividends, with the country’s most populous province now boasting over 328 stores and quickly growing. Given the private retail competition in these two provinces, we are starting to see retailers approach the market in differentiated ways from store size, to design elements, to the products they carry. It is clear that this competition ultimately is leading to consumer choice and options, similar to other retail segments.
| Province or Territory | BC | Alberta | Saskatchewan | Manitoba | Ontario | Quebec |
| Number of Stores at 1/31/21 | 311 | 560 | 57 | 60 | 406 | 59 |
| Online Sales | Gov’t | Gov’t | Private | Private | Gov’t | Gov’t |
| Delivery | Gov’t | Gov’t | Private | Private | Gov’t | Gov’t |
| Direct Purchasing from LPs | No | No | Wholesale direct to retailers | Eligible LPs ship directly to store | No | No |
Public Model Popular in the East
Moving further east to Quebec and out to the Maritime Provinces, we see a starkly different approach. Generally speaking, these provinces have chosen to keep retail in the domain of governments. While other provinces across the country have loosened their retail rules to allow more options, Quebec and the Maritimes have remained dedicated to a government-run model.
| Newfoundland & Labrador | New Brunswick | Nova Scotia | PEI | Yukon | Northwest Territories | Nunavut |
| 29 | 20 | 22 | 4 | 5 | 6 | 0 |
| Gov’t | Gov’t | Gov’t | Gov’t | Gov’t | Gov’t | Gov’t |
| Gov’t | Gov’t | Gov’t | Gov’t | Gov’t | Gov’t | Gov’t |
| No | No | No | No | No | No | No |
As with many sectors and opinions in Canada, geography matters for how people and governments view issues. Cannabis is no different. And while that can be confusing for retailers across provincial borders, it is uniquely Canadian and unlikely to change.
Will Stewart is the National Lead for Public Affairs for Hill + Knowlton Strategies Canada. He has extensive experience in Cannabis having represented dozens of cannabis companies as well as having served in executive capacities in house with licensed producers and retailers and provided testimony to the Senate of Canada on Bill C-45, The Cannabis Act.