By Dylan Dee
October 17th is rapidly coming ahead, marking the official date for marijuana legalization across Canada. The first example of a major country rolling out nation-wide legalization (so far, only Uruguay has this distinction), many eyes across North America and beyond are seeing how this will impact different areas of life, from crime to even real estate, if you can believe it.
However, when it comes to most, the main focus on cannabis legalization is what it will do to the economy, and retail businesses are the face of that impact in a variety of ways. While we won’t know the true reach of legalization until it comes into place, here are some potential ways it could impact your retail business in the future.
For one thing, if you want to start a brick-and-mortar establishment, move your online business to the physical realm, or expand to some new locations, chances are that cannabis is going to drive up prices. Several sources are reporting that there is an increasing amount of demand for 1,200 to 3,000 square feet of retail real estate to set up cannabis shots in malls and street-front locations. As a note, though, different rules by province will potentially play a role here. For example, in Alberta, demand for real estate is at its highest because it is going fully private for cannabis retail. Other provinces with a blended approach, like Ontario or British Columbia, probably won’t see as big a rush.
However, even if you’re not involved in cannabis directly, the motto of “a rising tide raises all boats” should be enough to get any Canadian retailer excited. To get an idea of what legalization can bring to the local economy, we want to look to the south, to the states in the United States that have legalized marijuana. The first to do this was Colorado, where it was reported that a fully taxed and regulated cannabis industry brought in 58 million USD. Even if you factor in associated costs, the profits made are 23 million USD.
How does this translate to benefits for retail businesses? Foot traffic counts for a lot. If a dispensary opens up near your business and generates a lot of interest, you suddenly have a lot of people aware of your business that may not have been before. This doesn’t automatically mean profits, but in situations where many feel like Canadian retail is lagging, any potential shot in the arm should be welcomed.
Along with the potential for customer infusion and changes to commercial development availability, it’s also important to mention that cannabis legalization is also adding a lot of new businesses and entrepreneurs into the economy. Aside from dispensaries themselves, there are many other “marijuana-adjacent” industries that will indirectly see growth from this new audience. This can include companies that sell gardening products or tools that growers will need, or delivery services that provide people with their cannabis when they can’t pick it up in person.
In some cases, there are new industries directly servicing the cannabis industry that are infusing money into the local economy. The delivery industry is a major example, but other companies are specifically training retail professionals for the specific needs of the consumer, like Lift & Co. This Toronto-based company helps provide training for business owners and employees to better serve cannabis customers, giving their businesses the means to compete.
The advent of e-commerce has already led to a massive sea change in regard to how those in retail practice their business and reach out to customers. However, we’re already seeing that cannabis has the potential to do the same, but potentially in a positive way. The eyes of the business world are sure to be on Canada this fall, though.
Dylan Dee is the community manager for Lift & Co. He is passionate about connecting cannabis experts with bud beginners.
Cannabis stock photo by Yarygin/Shutterstock