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Once dominant, cannabis real estate set to shrink: RE/MAX

Published on May 27, 2022 by David Wylie

Photo: Adobe Stock/the oz.

Cannabis shops “are largely over-represented in most major Canadian centres,” a new report from RE/MAX Canada has found.

The 2022 Commercial Real Estate Report predicted the cannabis industry will amalgamate over the next 12 to 18 months, creating an influx of retail inventory.

In Winnipeg, a market shakeup caused by cannabis closures is expected even sooner, within the next six to 12 months.

“The cannabis industry, once a dominant force in terms of retail consumption in the city, is undergoing contraction given ongoing mergers and acquisitions,” says the RE/MAX report.

Meanwhile, in the Greater Toronto Area, property managers are taking extra precautions, says the report, including bigger deposits and more thoroughly checking credit scores.

“For landlords, in addition to rising expenses, challenges exist in the form of an already fragile retail footprint that is over-saturated in fast food and cannabis operators that might not survive the fierce competition on every major block on high traffic streets.”

The report notes a similar trend in Ontario’s Niagara region.

Authors examined 12 major Canadian centres from Metro Vancouver to St. John’s.

As cannabis stores close, the spaces likely won’t stay empty for long.

Overall, the report found that demand for industrial, multi-unit residential and farmland was unprecedented in the first quarter of 2022.

Values for such properties are hitting record levels, while retail and office are starting to show signs of growth in multiple markets.