Mom-and-Pop Shops Compete Against Corporate Giants in the Canadian Cannabis Marketplace

(gmutlu/iStock)

If there’s one thing Canadian cannabis legalization has shown, it’s that the corporatization and consolidation of the industry go together like peas in a pod.

Take what happened with Hiku Brands, which looked set to merge with producer WeedMD—but at the last second, a superior offer came from Canopy Growth, and now Hiku is merging with the goliath enterprise that owns Tweed and Spectrum Cannabis.

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But what about alternatives to the goliaths, where buyers could be sure their cannabis purchases support the local economy? When legalization goes live on October 17, Canadian cannabis consumers will have their pick of locally owned mom-and-pop pot shops—at least in some provinces.

A 23-year-old business student from Saskatoon won one of seven retail cannabis permits granted to the municipality with an application she filled out in her bedroom.

Saskatchewan is one. As the CBC reported last month, Cierra Sieben-Chubak, a 23-year-old business student from Saskatoon, won one of seven retail cannabis permits granted by the province to the municipality, with an application she filled out in her bedroom with no professional assistance, to boot. The permit allows Sieben-Chubak to continue the permitting process and requires her to open a store within 12 months of legalization.

Sieben-Chubak’s story follows a similar tale out of Labrador, where the mother-son duo behind Tobin’s convenience store was the sole applicant in the region to advance to the next phase in the province’s application process.

For those provinces permitting private stores, the rules can be arduous.

Alberta plans to license approximately 250 retail stores in the first year of legalization, and will require applicants to demonstrate that they are a “separate business” from “any other business”—a requirement that may have played in favour of nimble local business that hadn’t already established large cannabis-related companies.

Alberta requires applicants to be a “separate business” from “any other business”—which may have played in favour of nimble local business unaffiliated with large cannabis-related companies.

In Saskatchewan, among the recipients of the 51 retail permits the province announced on June 1 are many individuals and small businesses. In a press release, the province said that over two-thirds of the applicants that received retail permits are from Saskatchewan or have operations in the province.

Pot Shack Saskatoon was one of the companies that received a permit from the Saskatchewan government. “It was a decent process,” says Pot Shack cofounder Geoff Conn about getting his permit. “When the government comes out with an RFP [request for proposals], they have particular needs, so as long as you follow the guidelines they lay out for you, it’s fairly straightforward.”

The process in Saskatchewan required applicants to provide a satisfactory response to its RFP, after which approved applicants were placed in a random lottery for the province’s 51 retail permits. This approach resulted in a healthy mix of entrepreneurs and small businesses being given the go-ahead to sell cannabis later this year.

But that’s not to say the mom-and-pops won’t face tough competition. Cannabis behemoth Canopy Growth, arguably one of the largest cannabis companies in the world, was awarded five retail permits in municipalities across Saskatchewan, more than any other successful applicant.

There will similarly be competition for the Tobin family in Newfoundland and Labrador, where 10 locations of Canadian supermarket giant Loblaw have advanced to the next round of licensing.

Will small-business and mom-and-pop retailers survive against the larger players? That remains to be seen. But it wouldn’t be shocking if this new industry creates a number of successful local entrepreneurs across the country.

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