More cannabis stores to open in Sault; is the market saturated?

Following the legalization of recreational cannabis use for adults in Canada in 2018, Hello Cannabis became the first cannabis dispensary in Sault Ste. Marie in early 2020.

Then came more local dispensaries.

Then some more.

Now, there are eight cannabis stores authorized to do business in the Sault and three more locations under review, according to the Alcohol and Gaming Commission of Ontario, which issues licenses to operate cannabis stores in this province.

Do local cannabis store owners feel that there are too many stores in a city the size of Sault Ste. Marie in such a short time?    

“I most certainly think that the market is saturated,” said Leeann Charrette, Hello Cannabis manager.

“I’m a firm believer in having a dispensary in the west end, have one central, have one in the east end, have one downtown. Now you can throw a stone at your competition.”

“We did take a cut in sales which we anticipated but we’re not suffering. We’ve retained so many of our regular customers through relationship building and our staff is so knowledgeable that our customers keep coming back to us.”

Loyal customers notwithstanding, SooToday asked Charrette if she thinks that the AGCO has been a bit too liberal with issuing licenses to operate cannabis stores.

“Yes,” she said unequivocally.

“We had to go through a lot to get our license. There was a backlash from Saultites with the negative feeling with a cannabis store opening, and we were so close to the Pee Wee. There were just so many hoops we had to go through and now the AGCO is just letting them open up everywhere.”

“It’s kind of hard to say, but I don’t believe everybody’s going to make it,” she said of some other local cannabis stores.

Hello Cannabis opened days before the COVID-19 pandemic struck the world in March 2020.

The cannabis store was locked down due to the pandemic but it was allowed to reopen as an essential service, albeit with curbside service only.

“It was tough,” Charrette said, reflecting on those early pandemic days before the current widespread lifting of restrictions.

“I do think that not all of us will be successful. What we can’t anticipate is that transition from the black market. We still have lots of these (unlicensed) stores. We have dozens of illicit online websites and so a big part of this is the government enforcing the new legislation under the Cannabis Act,” said Robert Carroll, Due North Cannabis owner.

“We really try to focus on the locally owned and operated aspect and customer service is our number one priority, and we also know the customers care about price, so we’re really trying to tick all those boxes,” Carroll said. 

“In our experience we‘ve seen a great reception from the community. There’s certainly a demand for it…I think it was back in November that the legal market finally outpaced the illicit market for the first time.”

There are two Due North Cannabis locations in the Sault, Carroll is planning to open a third.

“The Cannabis Licence Act 2018 and Regulation 468/18, which set out the AGCO’s authority in licensing cannabis retail stores in Ontario, permit stores to be located anywhere that other retail operations are allowed, provided the community or municipality 'opted in' to having them. The provincial legislation imposes no limit or caps by region,” said Raymond Kahnert, AGCO spokesperson in an email.

“However, the proposed store locations must be compliant with the provincial school distance buffer, which is a minimum distance of 150 meters between cannabis retail stores and schools, as defined in the Education Act, including public schools, private, and federally-funded First Nation schools off-reserve,” the AGCO said.

“The AGCO maintains a rigorous licensing and eligibility review process. We will only license applicants who meet all legal and regulatory requirements to operate in Ontario’s legal cannabis market. Our focus is to ensure cannabis retail licensees operate with honesty and integrity, so cannabis is sold responsibly in accordance with the law.”

With eight stores authorized to open and up to three more coming, Robert Carroll of Due North Cannabis doesn’t appear to be overly concerned with competition or saturation.

For him it’s all about quality and knowledgeable customer service.

“From our perspective the pie is certainly getting bigger but ultimately there will be a shakeout in the industry,” Carroll said.