Cannabis store

City could put a one-year moratorium on new cannabis shops

The clustering of cannabis shops on certain main streets in many areas of the city without any input from the local community has become an issue, and a new motion coming to city council on Nov. 9 looks to add some clarity. 

On Wednesday afternoon, Toronto city council will vote on councillor Kristyn Wong-Tam’s motion on cannabis retail licensing. Seconded by councillor Paula Fletcher, the motion recommends city council endorse Davenport MPP Marit Stiles’ Bill 29, which in essence involves aligning cannabis retail licensing with that of alcohol licensing. Meaning that those in the community would have a say as to when or where a new cannabis retail shop opens as well as making sure that new stores are not located close together in certain neighbourhoods.

As well, the motion asks city council to request the Ontario government to place a moratorium on the issues of new cannabis licences and retailers in Toronto for one year or until Bill 29 is successfully adopted.

“It’s not uncommon now that you see perhaps three or five, maybe even seven in some cases, where the stores are all clustered together,” said Wong-Tam. “It really does harm a neighborhood’s vibrancy, it hurts the diversity in the variety of businesses that we need on any main street to build a complete neighborhood.”

Meanwhile, Bill 29 passed through the first reading at Queens Park on Oct. 26. It’s meant to address what many see as a proliferation of cannabis retail stores in Toronto, and one of its stated purposes is to “ensure access to legal cannabis is maintained without pushing out diverse businesses that make our local economies thrive.”

Wong-Tam said that the response from constituents, shopkeepers, residents and other retailers has been unanimously in favour of the bill. She added that even High Tide, one of the largest cannabis companies in Canada, supported limiting the number of stores that can open on any main street.

“I think [this] speaks to a couple of issues. Number one is that even cannabis retailers understand the ridiculousness of co-locating five or seven stores on a block,” said Wong-Tam. “And I think that… the question might be: Are they harming themselves if they are not properly regulated and controlled? Are they going to oversaturate a market and make a neighborhood less desirable?”

In August, the Ontario Cannabis Store (OCS) announced a milestone of 1,000 authorized locations in the province. Now that number is 1,143. By contrast, there are about 660 LCBOs.

Of that number, Toronto has 368 As of July 2021, the average distance between consumers and a cannabis shop in Toronto dropped to 6.5 kilometres from 19 kilometres between April 2020 and March 2021. 

For her part, Maureen Sirois, the chair of the Eglinton Way Business Improvement Area (BIA), recalls about four or five cannabis stores in the nine blocks that make up the area. However, some stores are announced but never opened, or their lifespans end up being relatively short. So for Sirois at least, the market reigns supreme. 

“The thing is, the market in so many ways will decide how many cannabis stores to have,” said Sirois. “Everybody’s jumping on the bandwagon. But if you read the paper, it’s not the golden egg that a lot of people think it is. Sales aren’t there.”

Many industry experts are warning of a “bloodbath” for cannabis retail in 2022, given the number of stores, particularly in the GTA. RBC Capital Markets Analyst Douglas Miehm said in a recent report that the average monthly sales per marijuana store in Canada has now fallen to less than $200,000 in August, compared to nearly $300,000 two years earlier.