Toronto has seen almost 12 cannabis stores open per month on average since the beginning of 2021, bringing the total number in the city to more than 200 – double the number at the start of the year.
That includes another 10 stores receiving their first wholesale delivery in October, according to data provided to MJBizDaily by the Ontario Cannabis Store (OCS), the province’s government-run wholesaler.
The OCS’ internal definition of “open stores” refers to those that have received their first wholesale delivery and are ready to do business.
Meanwhile, Toronto led all Canadian cities with 47.3 million Canadian dollars ($37 million) in regulated sales in September, almost as much as the provinces of British Columbia and Quebec, which totaled CA$49.2 million and CA$51.3 million in sales, respectively.
The OCS uses city boundaries identified in applications for cannabis retail licenses. For Toronto, that excludes municipalities such as Etobicoke, North York and Scarborough.
Neighboring Mississauga, one of the biggest municipalities in Canada, still prohibits regulated cannabis stores within the city.
Some analysts and industry sources are concerned that cannabis retail concentration in parts of Toronto could result in store closures because of fierce competition.
In October, BMO Capital Markets analyst Tamy Chen warned that any fallout from store closures could be felt upstream, especially by cultivators.
“Given the store saturation in parts of (Ontario), we are increasingly worried about the looming possibility of retail closures in the province,” Chen wrote in a note to investors.
Some experts have suggested independently owned stores could struggle to survive in competition with larger rivals amid any retail shakeout.
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But Sasha Soeterik, co-founder of independently owned Flower Pot Cannabis on Dundas Street West in Toronto, said smaller retailers are better at managing their spending versus their larger rivals.
“We’re able to pivot,” she said in a phone interview.
“I can’t tell you how many times I’ve pivoted in the last three years, and I’m still here. You have to stay a little lean.
“As quickly as they allowed us to do delivery, I revved in my car and started delivering. I don’t know how quickly the big guys can do that.”
It could be a similar phenomenon to what has been playing out among Canada’s largest cannabis producers, which sunk too much money into the wrong parts of the business, making them too slow to react to the fast-evolving sector.
Those producers have lost billions of dollars and laid off thousands of workers since the start of 2020.
“That’s the beauty of what I have going on. My bills are a lot lower, and I have the stamina to pull through,” she said.
“I’m not worried about paying the rent. I’d like to make more money, but I’m accepting of the situation that, for us, to see this as a viable, growing business might take more than being open just one year. It might take three years.”
In Ottawa, approximately 2.5 stores opened per month on average this year, per the OCS data.
As of Oct. 21, the OCS said 45 stores were open and had received at least one wholesale delivery.
Roughly CA$14.6 million of recreational cannabis products were sold in Ottawa in September, 3.7% more than the previous month.
Matt Lamers can be reached at email@example.com.