Up in smoke: Recent cannabis store closures in Uptown Waterloo could be signs of oversaturated market
Up in smoke: Recent cannabis store closures in Uptown Waterloo could be signs of oversaturated market
Up in smoke: Recent cannabis store closures in Uptown Waterloo could be signs of oversaturated market
Cannabis shops cropped up quickly across Waterloo region, but it seems some are now closing shop shortly after they arrived.
At least one expert says the shift could point to signs of saturation as the heavily competitive fight for cannabis sales takes its toll.
In Uptown Waterloo there are now three cannabis stores where until recently there were five.
The first, Bud & Sally opened in March 2020. It was quickly followed by others, popping up on what seemed like every corner.
“It obviously came in with a lot of speed and there wasn't a lot of information available for the people who were opening a cannabis store to know who else was planning to open one Uptown,” Ward 7 Coun. Tennille Bonoguore said.
The high hopes faded quickly. After six months of struggling, Bud & Sally changed hands, turning into Canna Cabana after an acquisition deal.
Canna Cabana remains, but others in Uptown Waterloo haven’t been as successful.
Hyerlove Cannabis Collective announced its closure at the end of June, less than five months after opening.
Down the block, Hunny Pot Cannabis, which opened last summer, is also closed for good.
Brad Davis, associate professor of marketing at Wilfrid Laurier University says the closures are a strong sign the shops were too clustered together.
“I don't know if you'd find too many locations anywhere where you have five stores offering basically the same product in close proximity and all five are going to survive,” said Davis.
With no shortage of options, Davis said there could be even further closures in the area.
Sweet Seven Cannabis is one of the three Uptown stores still standing – and they’re feeling the crunch.
“There is a concern for dispensaries - cannabis stores - that are open, and still opening in the city but also how near they are to each other,” said Sweet Seven Cannabis manager Carmen Menendez.
While experts point to small profit margins and the high costs of being located in urban areas, places like Sweet Seven say it's not only selling the same products that makes competition tough, it's going up against the larger corporations that can afford to offer their product at a lower price.
“They are trying to put the price under the OCS [Ontario Cannabis Store] price which is very hard to compete with,” said Menendez. “It's impossible to compete with that.”
WHAT CITY HAS THE MOST CANNABIS STORES?
According to the Alcohol and Gaming Commission of Ontario (AGCO), the number of cannabis shops in each region varies, with each shop being designated as authorized to open, in the process of opening or in the public meeting phase.
The AGCO lists the cities within Waterloo region and Guelph with the following number of cannabis shops:
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