23 and Counting — Cannabis Shops Spread Like Weeds During Pandemic

Article by Terry Pender, Waterloo Regional Record

Brian Garner stands in front of his marijuana shop, Caribbean Oxygen, in Cambridge. WATERLOO REGION 23 and counting — cannabis shops spread like weeds during pandemic Terry Pender By Terry PenderRecord Reporter

Marijuana retail shops are getting thick on the ground in some parts of the region and Brian Garner wonders where it will end.

Garner opened Caribbean Oxygen at 124 Main St. in the Galt section of Cambridge in January 2021. During that month Ontarians spent $90 million in legal weed shops.

It took more than a year for the Alcohol and Gaming Commission of Ontario to approve Garner’s licence application. He invested a little more than $200,000 to open his 1,500-square-foot marijuana retail shop only to see others open a short distance away.

“Two more opened a 45-second walk from my location,” said Garner. “There is another one that is a two-minute drive away, and another that is a three-minute drive, just in the area I am located.”

There are about 23 legal marijuana stores around the region and there are applications for 53 more.

“I know some people who spent seven figures to open their stories, and some stores are not going to last another few months,” said Garner. “There are too many.”

In Kitchener there are six open now with applications for another 24. In Cambridge there are nine shops open and applications for 17 more. In Waterloo there are five cannabis stores open and 18 applications from others.

Marijuana was legalized in Canada in October 2018. At first, the provincial government tried a lottery system for licences. That was scrapped and it opted for a free-market approach — anyone can apply for licence to open a cannabis retail shop if they can afford the $10,000 fee.

The psychoactive plant is now an inexpensive commodity produced for less than $6 a gram, and sold at 734 authorized marijuana retail stores across Ontario. Big companies with deep pockets are opening outlets a few doors away from existing shops.

“It is almost a race to the bottom now,” said Garner. “Our plan is to maintain our customer base.”

He spends time speaking with customers, gets to know their names, and helps them navigate the many choices of strains and products. He plans to start at YouTube channel to educate customers. Some shops offer free delivery.

“It has been pretty good, pretty steady, it has been increasing week over week as I track it,” said Garner. “We have a pretty loyal customer base already, and hopefully that will continue to grow.”

The number of retail marijuana shops will soon surpass the number of the LCBO outlets in Kitchener-Waterloo and Cambridge.

“They have been popping up,” said Haim Halawani, the manager of Phoenix Cannabis at 90 Queen St. S. in downtown Kitchener. “Just on our corner there are three of them.”

Phoenix Cannabis opted for a soft opening in the waning days of the pandemic’s third wave. A grand opening is planned for early summer.

Halawani believes cannabis stores will compete on prices, product quality, customer service and the in-store experience. The size of the market for legal weed is not known so dire predictions about a retail-weed apocalypse may not be justified.

“I don’t think they are all going to stay open, but you never know because it is quite a big market,” said Halawani.

During the month of January 2021 Ontarians spent $90 million in cannabis shops.

The Ontario Cannabis Store, which is owned by the Province of Ontario, has more than 2,000 products for sale. It is the only cannabis retailer allowed to sell online. It is expected to pump an estimated $170 million into the provincial treasury during the 2021-2022 fiscal year. The privately owned cannabis shops buy products from the Ontario Cannabis Store and sells those to the public.

“At the end of the day we are all getting the same product from the same supplier,” said Halawani.

So cannabis shops must compete on prices, in-store experiences and customer service. Many already offer free delivery. Some will carry a large variety of cannabis-infused drinks

Read the full article here.

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