In March of 2020, Toronto had twelve weed stores. Today, the city is overflowing with cannabis retailers, with more than 400 stores lining Canada’s largest city. But that’s expected to change soon. According to data from the Star, store sales are declining, new store openings have slowed dramatically, and cannabis licenses from the Alcohol and Gaming Commission of Ontario are being canceled.
Why the mass exodus? Experts have been predicting this decline for a while, with major bank analysts predicting a huge drop in industry sales and a loss of economic viability since last November. The large number of retailers has led to lower sales per location, with November 2021 sales already down one-third from two years earlier.
Locals have also pushed back on the number of Toronto cannabis retailers in the area. They don’t appear worried about legal cannabis in general, but are concerned that clustering so many stores together is a recipe for failure. Additionally, Zach George, CEO of Sundial Growers Inc., one of Canada’s largest adult-use operators, predicted in an open letter the loss of around 1,000 retail stores across Canada in the next year.
Though many stores will likely close from lack of revenue, others are getting acquired by larger chains, consolidating the market presence. Superette acquired Cannoe and Dimes, two former Toronto retailers with multiple locations this year. Though Superette has been swallowing up some little fish lately, Sundial has entered an agreement to now acquire Superette.
Though Toronto may be in a pickle now, the city council unanimously passed a motion last year supporting a bill to amend the Cannabis License Act and change the approval process for retailers. With the passage, municipalities have more say in the shops that can open in their cities, which is likely to slow down the already-declining number of shops opening in the crowded market.