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Sunday, Jan 29, 2023
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

The weed wire

Ontario promises to double pot shop approvals

With one store open per 97,000 people, the provincial government says its ramping up authorizations

Canopy Growth completes divestiture of Tweed and Tokyo Smoke operations
Photo via Tokyo Smoke

After two years of criticism, Ontario’s cannabis retail regulator promises to double the number of stores it authorizes this fall.

Late Tuesday, the Alcohol and Gaming Commission of Ontario said it’s been directed by the provincial government to pick up the pace of approvals.

The province took steps to open up the retail market last December when there were less than 50 stores open. That initiative included a plan to authorize up to 20 stores per month starting in April to bolster legal spending.

Read more: Ontario cannabis sheds lottery retail system, welcomes open market

The AGCO says it’s issued 164 store approvals to date and 150 stores are currently open. According to the commission’s website, there are another 573 store applications “in progress.”

“The AGCO will soon contact all affected retail store applicants directly to advise them of any change to the timing of the issuance of their store authorizations,” the commission said in a statement.

With a population of 14.6 million, Ontario has lagged behind other smaller provinces in total stores open. On a per-capita basis there’s currently one store per 97,000 people.

A lack of consumer access to brick-and-mortar stores in Canada’s most populous province has repeatedly drawn the industry’s ire. Some of the country’s largest producers have struggled to turn a profit in the first two years of legalization, often blaming a short count of stores in Ontario and Quebec for lacklustre sales.

Ontario promises to double cannabis store approvals

Cannabis products on display at an SQDC store in Montreal, Quebec. Press photo

In Quebec, there are 45 stores open to date, which translates to one per 189,000 people. The provincially-owned cannabis retailer, Société québécoise du cannabis (SQDC), has a total monopoly on recreational weed sales in the province. The SQDC plans to only trickle out new shops with up to 150 planned by 2023, according to Quebec media.

In mature U.S. markets like Colorado there is roughly one store per 10,000 people — the kind of retail density the industry has been calling for. Headset reported record statewide sales in July totalling US$176 million.

There are currently 1,100 stores open across Canada, or around one store per 34,000 people.

Alberta has continued to lead all provinces in store authorizations with 517 retail licences being issued to date.

Statistics Canada reported Alberta’s retail sales for June were $46.7 million, a close second to Ontario’s $48.9 million in sales despite Alberta’s much smaller population of 4.4 million.

Read more: June Canadian weed retail sales break $200M mark

Last week, Canopy Growth Corp. (TSX: WEED) said it was expanding its Tokyo Smoke and Tweed retail business into Alberta with 10 locations slated to open this month.

But with one store licence being issued in Alberta for every 8,500 people, there have been reports of product shortages and retail saturation.

Top image of a store opening in Toronto, Ontario via Tokyo Smoke

 

jared@mugglehead.com

@JaredGnam

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