Concern the legal cannabis market in Waterloo region may have reached its saturation point may be premature if first-quarter revenue numbers for Cambridge are any indication.
Revenue from cannabis sales at the 10 stores that were in operation between January and March of this year reached $3.27 million, according to statistics from the Ontario Cannabis Store (OCS), the agency that oversees sales throughout the province.
Local sales of cannabis totalled 386,000 grams, landing Cambridge in 20th place for total sales province-wide, and 53rd for per capita sales among 160 cities, reports the OCS.
Between April 1, 2020 and the end of this past March, about $840 million worth of recreational marijuana products were sold throughout the province, accounting for 44.1 per cent of the marijuana market. The rest was bought from the illegal market.
Eighty-four per cent of legal marijuana sales took place at physical store locations, versus 16 per cent for online sales.
Provincially, dried flower is the most popular offering, making up nearly 60 per cent of all sales, followed by vapes and pre-rolls at 16 and 12 per cent respectively.
As the revenue picture for retail cannabis in Cambridge was coming into better focus, Hunny Pot Cannabis opened its 10th location last month to become the city’s twelfth retail cannabis store. The OCS has five more Cambridge applications in process.
Hearing those numbers, Brian Garner says he thinks the local market may be “getting a little bit saturated,” despite seeing “week after week, month over month” growth since opening Caribbean Oxygen, in January.
The owner of the downtown Galt cannabis store says he can walk out the door of his Main Street location and see two other cannabis retailers less than two blocks from his. Two more aren’t much further out.
“I think as retailers we’re all sitting back and saying this is a bit much,” Garner says, adding he believes the government should have at least mandated distancing measures between stores.
The problem he says, is especially acute in some GTA cities where he’s starting to see cannabis stores listed on Kijiji and in commercial real estate posts.
“That probably tells you it’s a little bit saturated over there. There’s too much competition,” he says.
“I even hear from my customers who think three stores in downtown Galt is too much."
Since the only way stores can compete is on pricing, their focus is on customer experience, Garner says.
All legal cannabis retailers purchase product from the OCS at the same discounted rate so it’s up to them how much margin they’re willing to sacrifice to get customers in the door.
Garner says it's a "win-win" for customers if retailers keep racing to the bottom on pricing.
"The majority of our customers aren't coming in because of pricing. They actually enjoy the experience here," Garner says, adding incentives like their VIP program help build customer loyalty.
- With files from GuelphToday.com.
