THUNDER BAY – An ongoing boom in the number of local cannabis shops could test the limits of local demand, says the manager of one of Thunder Bay's newest stores.
Rainbow Cannabis and Accessories entered a market that's only set to become more crowded when it opened two locations in March, says manager Mackenzie Davis.
The company's stores on Bay and May streets could face competition from well over a dozen other local shops by next year, he anticipates.
The Alcohol and Gaming Commission of Ontario (AGCO) has approved applications to sell cannabis at eight stores in Thunder Bay, with several given the green light in just the past several weeks.
Nine other applications have already concluded a public notice period, while two others were listed as in progress as of Friday.
Davis isn’t sure the city can support that number of stores in the long run, but welcomes the competition, saying it will be good for consumers.
“We’ve been analyzing the local legal cannabis market for quite some time to see how big a slice of the pie everybody can get,” he says. “When we’re looking at 18 stores next year, I believe that’s probably too many, but with it being an open market, it’s kind of survival of the fittest at that point.
“I think the city can probably handle six to ten stores, if they’re spread out enough.”
When Rainbow, which has long sold accessories, opened cannabis sales in March, it was the culmination of a years-long journey.
“It was quite the process to get going,” says Davis. “We’ve been applying since applications were first being taken when the Ontario government was doing the lottery license [in 2019].”
Traffic had been steady since sales opened at the Bay Street location in early March, Davis said (the May Street store opened earlier this week).
The pandemic hasn’t seemed to dampen demand, though it has changed consumer behaviour.
“People are buying larger amounts at once,” he explained. “Instead of coming three, four times a week, they’re coming and buying one large amount.”
He believes the store’s central location, existing clientele, and competitive prices will help set it apart, but admits competition for the local market could get fierce.
Tokyo Smoke opened the city’s first pot shop just over a year ago, at the beginning of March 2020. It was quickly followed by several others, with four open by June.
More recently, communities across the region have seen a glut of store applications.
Stores have been authorized to open in Fort Frances, Dryden, and Kenora, with additional applications pending in each community. Stores in Red Lake and Longbow Lake are also awaiting approval, with the public notice period concluded.
While the legal market is booming, Davis says some estimates indicate fewer than half of cannabis users are purchasing product legally.
He’s optimistic that will gradually change, saying the offerings at legal stores had improved markedly since they first opened – though there’s still room for improvement, particularly on pricing.
“The difference in pricing and quality even from legalization until now is significant,” he says. “I know a lot of people had problems with how dry it was or how expensive it was [initially].”
Note: An earlier version of this story indicated nine cannabis stores had received AGCO approval in Thunder Bay. The AGCO website listed eight stores approved locally as of April 4.
