Paul Tuns:

Cannabis became legal in 2018, but the number of legal pot shops in Ontario has exploded in 2021, with no end in sight to new openings, with the number of locations selling marijuana soon to eclipse the number of dedicated liquor and beer stores in the province.

According to the annual report of the Ontario Cannabis Store (OCS), the province’s pot dispenser, said in its annual report, there were 572 pot shops in Ontario on March 31, with 179 in Toronto, 188 in western Ontario, 123 in eastern Ontario, 51 in the Greater Toronto Area outside the city, and 31 in northern Ontario.

Outside Toronto, the cities with the most pot shops as of March 31 are Hamilton (27), Barrie (10), Thunder Bay (seven) and Waterloo (six). Municipalities such as Mississauga and Markham do not allow cannabis shops to open within their borders.

The report said that in April 2020, the average distance between a consumer and pot shop was 19 km, but by March 2021, the distance fell to 6.5 km. The only restriction for communities that permit pot shops is that they cannot open within 150 metres of a school. The Globe and Mail reported that many Toronto pot shops are “clustered together in high density neighbourhoods” including “a three-kilometre stretch on Queen Street West, for example, has 23 cannabis stores either open or about to open” and “another eight cannabis stores just a block north of that, on Dundas Street West” and “in nearby Kensington Market … has a cluster of five legal stores.”

The Globe and Mail reports another 1000 pot shops are expected to open between March 31 and September.

Another Globe and Mail article reported that 30 pot stores were opening every week, that on July 19 there were 817 pot shops operating in the province and that 173 stores were on the verge of opening, and that there were 1039 retail store applications in the works in Ontario. That means there could be more than 2000 stores in operation within the next year or so.

According to the 2020 Liquor Control Board of Ontario annual report, there are 669 liquor stores. According to the Beer Store website, there are 440 beer stores in the province. That means there are 1019 stand-alone liquor and beer stores in the province.

The OCS annual report said that 99.1 million grams of cannabis was sold in the 2020-2021 fiscal year, or $840 million worth of fried flower, pre-rolls, or cannabis vapes, edibles, oils, and beverages.

Despite the reach of the vast network of legal pot shops and more than $800 million in sales, the OCS’s annual report states that the majority of marijuana purchased in the province is through illegal channels. David Lobo, interim president of the Ontario Cannabis Store, the province’s pot dispenser, said “While our legal marketplace has a great distance to go to fulfill our mandate of bringing in legacy consumers, the progress made in 2020-2021 deserves celebration.” He said he hopes the increased number of pot shops and drop in the price of cannabis at legal outlets from $7.05 a gram in 2020 to $6.17 in 2021, will bring more consumers from the black market to the legal market.
  The Globe and Mail ran two stories in July about the “pot store boom” and Lobo’s expectation that the “soaring number of pot shops in the province will likely result in so much competition that some will close”. Vanmala Subramaniam, the Globe’s capital market reporter, quoted numerous financial analysts predicting that the large retail pot chains are likely to dominate the market and “the only real hope for small businesses is to eventually be bought up by a larger chain.” Or in the words of Lobo, “this rapid growth will likely result in some retailers being faced with increased competition and a crowded marketplace, which could result in some closures and market rightsizing.”