The question of when cannabis retail will hit a saturation point in Ontario has long been on everyone’s minds.
Ontario is currently home to 1718 cannabis retail stores with an additional 247 license applications under review or in public notice period. 219 of those stores are open in Toronto with another 30 licenses in progress. Out of those, 43 stores are open for business or on their way to Queen Street West and East.
A major east-wise thoroughfare in Toronto and hub to some of the city’s best restaurants, cafes, independent boutiques, and galleries, Queen West was once dubbed by Vogue Magazine one of the world’s coolest neighbourhoods – so it’s easy to see why so many retailers have landed here. But are there too many cannabis retail stores on the street?
Amy Wang, Store Manager of Cerenibis Canada located on Queen Street East in the Beaches, says the number of stores has impacted them, but believes the density on Queen East is ‘a little bit better’ than Queen West.
“Before the store opened, we did a lot of research on the location,” says Wang. The owner of Cerenibis was also familiar with the area and population, having lived in the Beaches. “But the competition is really tougher than we expected,” she says. “The demand is there, but people can go to different stores.”
Wang says lowering prices hasn’t made much difference, but customers do care about the product selection and customer service. “We deal with the competition by bringing in more variety, talking to the customers, and making sure we know what they need.”
In the last month, several stores have closed down close to them. Wang notes that in addition to the number of stores, the rent is very high on Queen East compared to other parts of the city.
Joe Khan is the General Manager of Bonnefire, a retailer with several locations in Ontario, including on Queen Street West. Bonnefire opened its doors in March 2020 and ahead of most of its competitors in the area, giving them an advantage, Khan says.
But today, there are 12 stores on Queen Street within a 1.4 km stretch. “In the old days, you opened your store and people would come find you,” he says. “Now, you have to be focused on marketing and what is going to differentiate you.”
Khan has seen a number of stores open around them, hope for the best, and it doesn’t work out. He believes success comes down to the business model, knowing what your intentions are, not giving up, and providing an exceptional customer experience.
Khan takes great pride in the product knowledge of their budtenders and the unique communities they’ve built at each store. “There is a lot of passion and knowledge for the industry,” he says. “We’ve been very fortunate to attract the right talent who want to make a difference. We’re constantly trying to be innovative and bring in new things, so we can stand apart from anyone else. We focus on education more than anything.” Khan notes the workshops they’ve held on everything from rolling your own joint to growing your own cannabis.
Adam Vassos, Chair of the Retail Cannabis Council of Ontario, Senior Counsel at Vassos Law LLP, and Chair and President of the Retail Cannabis Council of Canada, believes the number of stores in Ontario has peaked out at what the market has dictated it can accommodate.
Vassos believes the largest impediment to stores doing well is not the number of stores, but predatory pricing and the illicit market – two things largely out of a retailer’s control. He thinks things will change for the better, but notes there’s work to be done on enforcement and government efficiently and effectively working with industry and getting input from retailers.