When it comes to cannabis retail, Canada contains multitudes. Iterations range from government-run stores on the East Coast, private retail locations in the West, to more ambitious attempts to raffle off the business licences in Ontario. A lot of things can be said about the rollout of retail cannabis sales, but there’s one thing everyone seems to agree on: if nothing else, it’s been interesting to watch.

In the first year of legalization, retailers are figuring out there isn’t a single “right” way to sell cannabis. The provinces and territories have set up different regulatory regimes, and businesses are finding ways to operate within those rules.

Hedging supply challenges

Retailers across Canada have been most preoccupied with supply challenges. With many provinces setting up wholesaling operations, which have the exclusive right to buy from licensed producers, many of the decisions retailers make depend on how the provincial body wants to do business.

While some are quick to criticize the operation of these provincial bodies, their existence is as much dictated by the need to carefully manage supply as anything.

Some retailers, though, don’t love these regulatory interlocutors.

“Everything’s been slow, and slower than we would like with the supply shortage,” says Trevor Fencott, CEO of retailer Fire & Flower, which currently has locations in Alberta, Saskatchewan and Ontario. The basic fact of supply challenges has pushed provinces to regulate in different directions, which has a knock-on effect on the retail landscape.

“We see the differences in the way the provinces approach the problem. Obviously Ontario’s was to say, ‘Look, we’re just going to restrict the number of licences,’ versus Alberta, who said, ‘We’re going to open up the licences but restrict supply,’” Fencott says.

Canada’s most retail-friendly region may be the Prairies, specifically Saskatchewan, which Fencott calls “probably the most positive.” There, retailers can deal directly with producers, eliminating a step some retailers see as contributing to the very supply challenge they’re meant to manage.

Fencott says Fire & Flower has never had supply issues in Saskatchewan.

“We went directly to these producers who we know, and got direct deals with them. And they understand that as part of this partnership, if they don’t produce product then it’s obviously going to be very challenging to convince us to buy their products. So it’s a natural check and balance there.”

In Manitoba, Saskatchewan and Alberta, regulations that allow companies to vertically integrate throughout the supply chain are applauded by retailers as a way to mitigate supply challenges and smooth out the bottlenecks.

“We certainly see the merits in that,” says John Arbuthnot, CEO of delta9, a Manitoba-based licensed producer and retailer. “We have a little bit better ability to combat any of these shortages [by] supplying our own product to our stores.”

‘Government weed’ and the consumer disconnect

But for some, retail is just one small part of a larger, more abstract process of actually getting cannabis consumers on board — something that’s far from a foregone conclusion.

There remains “a disconnect between the regular cannabis consumer and the legal industry,” says Abi Roach, owner of the HotBox Cafe in Toronto. Recent statistics suggest more than one-third of cannabis consumers are still buying their pot off the street, rather than in retail shops.

“The fact that most people who consume cannabis still call it ‘government weed’? That’s the disconnect,” Roach says. “So how do we shift people’s minds into becoming a legal consumer? Having a retail store is great, but if people aren’t interested in visiting or coming back, how do we bridge the gap between the legal industry and the consumer?”

Nick Kuzyk of High Tide Inc., the company behind the Canna Cabana retail chain, points out many customers might continue to feel somewhat alienated by legal products they can’t interact with.

“It seems like you have a lot of retailers who aren’t letting customers interact with the product in any way,” he says. “Most set up with product behind the desk, dispensary style.”

Canna Cabana tries to give customers a more hands-on experience, at least as much as regulations will permit.

“Our layout has these fish bowls, these islands, with the product displayed under glass and the information is on top,” Kuzyk says. “People can kind of be left alone to do their own exploring and interact with the product through a couple different senses.”

Edibles and concentrates could shift retail landscape

While retailers continue to grapple with supply issues, there are other changes on the horizon — namely, edibles and concentrates. That, says Roach, is likely to have a greater impact on the retail landscape than licensing and supply issues, because it will allow for the proliferation of different varieties of stores.

“Right now, it’s very cut and dry — flower. Everyone’s selling the same thing,” she says.

But think about what a cannabis topicals store might look like, or a drinkables shop, and you can see cannabis retail as it exists right now is only a small sliver of what it could become.

“Right now cannabis is the main product — of course! It’s the cannabis stores,” Roach says. “But I think the big shift in retail will be about cannabis that is a product within other things.”

For retailers, the rollout has been defined by the need to comply with regulations that are constantly being clarified and (in the case of Ontario) re-jigged on a short time scale. In short, nailing the retail rollout is both a work in progress and a moving target.

The flipside is that all of it will change and loosen up over time, and as the regulatory forces let their hair down, so will the retailers.

“If you look at the cannabis retail landscape from [20 years ago] to now and then imagine that, 10 years from now it isn’t overly restrictive,” Roach says. All three branches of the retail market — politicians, retailers, and customers — need to work in tandem with one another to make a thriving market.

“Our politicians are coming out of the hole of almost 100 years of prohibition and stigma,” says Roach. “If policymakers need to catch up to the industry, the industry needs to catch up to the consumer. Once that happens, everything will balance.”

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