Most private cannabis stores not viable: survey

Published on November 8, 2021 by David Wylie

The outside of the Eggs Canna location in Penticton
Eggs Canna's Penticton location was recently forced to close its doors permanently due to direct competition from the BC Cannabis Stores.

A majority of cannabis retailers in BC say they are severely struggling and feel their business is no longer viable, a new survey has found.

Challenges include direct competition with provincially run BC Cannabis Stores, an increasing number of unlicensed stores, and municipalities approving too many stores within close proximity.

“It’s becoming more clear that numerous privately run cannabis stores will be forced to close their doors,” says Sarah Ballantyne, with the Okanagan Cannabis Collective (OCC). “These are businesses run by local residents who are invested in their communities.”

The survey of more than 100 legal cannabis retailers in BC was jointly conducted by the OCC and the Association of Canadian Cannabis Retailers (ACCRES).

Results of the survey include:

  • 60% of legal cannabis retailers in the province believe their business is no longer viable
  • 90% of retailers surveyed say they are in direct competition with illegal operators, and 75% say that those illegal retailers are having a significant negative impact on their business.
  • 60% saying they have witnessed additional illegal operators open within the past year

“The finding that I found most concerning is that of those retailers that contacted the Community Safety Unit (CSU) regarding these illegal operations, 90% say they have seen no enforcement action,” says Jaclynn Pehota with ACCRES.

Meanwhile, government-run BC Cannabis Stores are poaching both employees and customers from private retailers when they set-up shop in town, according to the survey results.

“The fact that the province refuses to enforce the law is one thing, but to then have them open taxpayer funded businesses that are clearly operating at a loss will be the nail in the coffin for many private retailers,” says Ballantyne.

Eggs Canna president and co-founder Oana Cappellano recently told Stratcann that the chain’s Penticton location simply couldn’t compete with the BC Cannabis Stores location in the city and was forced to permanently close.

The survey shows other retailers are facing similar struggles.

The OCC and ACCRES are asking the province to immediately eliminate the 15% wholesale mark-up, cease the expansion of public stores, implement provincially mandated distancing requirements and adhere to their own laws with respect to enforcement.

The survey was conducted online Nov. 4-5, with 109 retailers responding.