Too Many Cannabis Stores?
Toronto Sun Asks How Many Are Too Many Cannabis Stores – LPC
The Toronto Sun is raising the alarm about the number of new retail locations popping up around the city. Eleven in Kensington Market. Thirteen on Yonge between Bloor and Adelaide. Perhaps unsurprisingly, 21 on Queen St. West from University to Niagara Ave. How many are too many cannabis stores?
“I think some people will be surprised to hear that in mature cannabis markets like Denver and Portland, cannabis retailers have outnumbered Starbucks by close to 2-1 for years,” Matt Lamers told the Sun. Lamers is the international editor at Marijuana Business Daily.
“There are way more cannabis stores in those cities than there are McDonald’s restaurants,” he said. “Legal cannabis is big business, and most markets can expect a population-to-store ratio of around 10,000 to one.”
While some might be nervous there are too many cannabis stores, Lamers said that the more, the better. He points out that much of the outcry is from people who didn’t want cannabis legalization in the first place.
“The major caveat here is that the stricter the regulations, the fewer transactions will be steered to the legal market. It’s safer to monitor the sale of this drug under the watchful eye of regulators than it would be to force all transactions to happen in the illicit market, like they had been for decades.”
He points to Mississauga, which recently upheld its ban on legal cannabis outlets within city limits. It’s proof that in a city where any cannabis store represents too many cannabis stores, the illegal cannabis market will flourish.
“The store ban pushes all taxable legal transactions to neighbouring cities, and untaxable and unregulated transactions to Mississauga’s lawless underground market,” Lamers said.
What About the Business Implications of Too Many Cannabis Stores? – LPC
Others wonder what the tipping point is – when does too many cannabis stores become unsustainable? Based on Lamers’ estimate of a 10,000-to-one ratio, Toronto at 2.9 million people could theoretically support 290 cannabis outlets.
Using real numbers in Canada, the number of stores climbs even higher. Based on Alberta’s 653 cannabis licensees, Ontario at 3.5 times the population could support almost 3,000 cannabis stores. Of that, Toronto could support 490 stores.
So, at 179 retail outlets, Toronto has a long way to go before there are too many cannabis stores.
Besides, Lamers said, there is no use in worrying about the business model since the market will shake things out in the end anyway.
“Over time that will change, and stores will differentiate, they’ll offer different experiences, unique products, just like any other industry,” he said. “And just like any other industry, some businesses won’t make it and others will.”
Change will always be worrying for some people. When the local Second Cup turns into a cannabis store, people will lament the changing neighbourhood. We should always respect those feelings of course. But ultimately, if those feelings are guided by cannabis stigma, they have to change, too. As long as opening cannabis stores reduces the illegal cannabis market, there will never be too many cannabis stores.
Read the Full Story at the Toronto Sun
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