Opinion: Too many cannabis shops, too much production: the industry’s perennial problem

Michael J. Armstrong is a professor at Brock University who studies the economic aspects of cannabis legalization.

Quebec’s government-owned outlets also did well, despite charging prices nearer to $8 a gram. Their per-store monthly sales averaged $950,000 in spring 2019. Consequently, monthly store sales there now average just $96,000. The estimated margins are just $24,000, making it tough to pay the bills.Private-sector shops elsewhere face similar troubles. Monthly store sales now average just $98,000 in Alberta and $89,000 in Manitoba.

By contrast, private-sector retailers have far more shops: 11 per 100,000 residents in Ontario and 16 in Alberta. What provinces should not do is merely tinker with regulatory details and hope that somehow fixes things.

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