All provinces are seeing store counts grow, but at different rates. British Columbia’s store count is growing at a steady-state, while Ontario’s has been growing exponentially.
The more interesting story is Alberta, where the number of new store openings has decreased significantly. The province appears to have reached a plateau on how many stores it needs to support its relatively small population of 4.3M people. Alberta’s current store count equates to one per 8,018 residents.
For context, Alberta’s per capita store count lies between those of two of the most mature legal cannabis markets in the U.S.: Colorado and Oregon. In Colorado, there is one recreational retailer per roughly 9,600 residents. In Oregon, there is one legal store for about every 6,150 people.
If we assume Alberta’s to be the optimal number of stores – an assumption buttressed by its position between two relatively stable, mature U.S. state markets – it provides some insight into how many retailers each province ultimately needs to open to reach the same ratio. Below is the result of this simple model: calculating the number of stores each province needs to meet the same ratio of one store per 8,018 people.
Based on this analysis, Canada as a whole would require a total of 4,638 stores, or 3.6 times the current number of retailers. While it is unlikely that Canada will reach that amount anytime soon, continued growth in store counts will ultimately lead to higher sales across the country. If we project using the average of 55 stores opened each month across Canada – the 2020 average so far – then we reach 4,638 stores at the end of 2023.
This level of accessibility would almost certainly minimize illicit market activity and shift most of the overall cannabis sales volume to legal channels – something the regulated industry is very much looking forward to.
Source: Canada Cannabis Spot Index, Cannabis Benchmarks