When the legalization of cannabis came into effect in October 2018, the country saw a massive boom of retail stores happening all across the nation. Years before the official legalization date, certain industry players were operating in the black market, gaining valuable customer base and loyalty, building their brand and name out there.
Big corporations started buying out and partnering left and right to gain traction in the market once October 2018 rolled in. Those major companies who partnered with growers became the biggest suppliers of the government’s stores. Some teamed up with the big established brand names to open chains of retail stores casting shadows on the mom and dad operated stores across Canada.
The demand for cannabis was projected to be huge when it first got legalize. Although the sales numbers are rather impressive, some stipulate the actual numbers are a bit lower than projections made more than two years ago. Many privately own stores opened up with those projections in mind expecting to take a small piece of the pie should be easy-picking in such a big industry.
For example, let’s take a look at Alberta, where both AGLC (Alberta Gaming, Liquor and Cannabis Commission) and privately run retailers can sell legal cannabis in the province. This model is great for businesses as it allows them to compete in a healthy market, keeping the best up top and weeding out the followers who didn’t do their homework correctly.
But here’s the catch; the Albertan government threw a curveball to private retailers by taking the province’s online cannabis sale monopoly. Only through the AGLC official website can someone order and get delivered to their home cannabis products. Private retailers are only allowed to set up online menus on their websites for customers wishing to pre-pay their order upfront and pick it up in stores.
There are over 599 private retailers currently operating in Alberta and trying to fight against the government online sales and each other for a piece of the market. Much like many new industries, the cannabis industry generated a lot of hype, excitement and maybe a bit inflated expectations.
As we slowly made the turn into 2021, we’ve seen a slight pullback in the cannabis license applications and number of stores opening, but nothing out of the ordinary. We will see a few stores here and there close down, and that’s all part of a healthy market. Businesses who will make the extra effort to build a loyal community around their brand and innovate on product development will see themselves rise above the rest and slowly but surely create a stable market where everyone remaining will be successful and profitable.
The Country’s most populous province had a rough start at this whole cannabis game, to say the least.
Before October 2018, Liberals originally planned to make Ontario’s cannabis market a provincial retail monopoly, very much like Québec’s current model where SQDC (Société québécoise du cannabis) official retail stores are the only way where someone can legally purchase cannabis product. They do brick-and-mortars retail stores, online sales for pick-ups and delivery within the province.
Ask anyone you know from Quebec if the SQDC’s weed is worth it...
Ontario new government quickly realized the mistake they’ve made and switched gears to allow the private sector to run the retail stores side of things while the OCS keeps the monopoly of the wholesale aspect and online sale throughout the province.
The Ontario Cannabis Store (OCS) is a government agency responsible for providing responsible access to legal cannabis in the province.
It took a while for Ontario to catch up with the other province regarding accessibility once the legalization happened. After one year and a half of legalization, Ontario’s retail store count was less than 100.
A slow processing time and bad reviews pointing out the apparent lack of selections in the OCS’s online website made for a rough start for the Ontario Cannabis Store, and a big missed opportunity at a significant amount of tax revenue for the province.
According to a recent report, the OCS demonstrated that only 12% of the whole province cannabis sales came from their online operation.
The brick-and-mortar stores make up for the vast majority of Ontario’s legal adult-use cannabis sales. As of early May, there are currently 611 stores actively serving the 14.8 million people in Ontario.
Since the beginning of the ongoing pandemic, the OCS has allowed private retailers to serve the Ontarians with delivery service, which has helped them immensely during these challenging times.
There will always be a government. There will always be big corporations with bottomless pockets. Still, if we want to keep our small and medium businesses alive and thriving in this market, each of us needs to take small actions to ensure their survival in this challenging industry.
By keeping our local independent businesses alive and well, we can all enjoy high-quality customer services and premium cannabis while keeping the mom-and-pop retail stores in business as they should.
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