Most Canadian Neighborhoods Are Within a Five-Minute Drive of a Cannabis Store, Study Finds

Four years on from the passing of its recreational cannabis legalization bill, Canada’s retail cannabis market is still expanding, a new study has found.

Published in the journal Drug and Alcohol Review, the study found that the number of stores per capita had increased by an average of 122% each year since legalization, with per capita sales also increasing by 91% per year. Most Canadian neighborhoods are also less than a five-minute drive away from a legal cannabis store, the researchers found.

While a lot of attention has been given to what happened in Canada in the 24 months immediately following legalization, the researchers say that less is known about how retail store access has changed in years three and four post-legalization. More generally, little is known internationally about how long markets can sustainably expand following legalization. With this latest study, the researchers say they hope to address that gap.

Four years after legalization, Canada exceeds 3000 legal cannabis shops

This study measured four different metrics describing brick-and-mortar retail cannabis stores across Canada: the total number of active stores per capita (measured per 100,000 people aged 15+ years), the number of permanent store closures, the drive time between neighborhoods and their closest cannabis store, and pre-tax cannabis sales per capita.

The researchers found that, as of October 2022, there were a total of 3,305 operational cannabis stores across Canada, which is equivalent to around 10.6 stores per 100,000 people aged 15+ years. Additionally, in the four years since legalization, a total of 267 stores that had at one point been officially opened were now categorized as being permanently closed.

Using the ArcGIS World Geocoding Network, the researchers also calculated that 59% of neighborhoods in Canada are within a five-minute drive of a legal cannabis store, with the median drive time needed to reach a cannabis store being just under three minutes and 30 seconds.

Under the Cannabis Act, every licensed cannabis retailer is required to report all their physical and online sales each month. Using these sales data, the researchers were able to calculate that, in the month of September 2022, Canadians over the age of 15 each spent an average of around $11.84 CAD on cannabis products.

Public vs private stores

Brick and mortar cannabis stores in Canada can be classified as either being public or private stores, according to whether they belong to a government-run cannabis retail system (as in Prince Edward Island, Nova Scotia, New Brunswick, and Quebec) or a privately-run system (elsewhere). The interesting exception to this rule is British Columbia, which operates a hybrid of the two, allowing for sales from both government-run and privately-owned operators. However, by four years post-legalization, 91% of stores in BC are now privately-run.

This systemic difference may be having a noticeable effect on access to cannabis and access to cannabis retail stores, the researchers suggest. In this latest study, they found that private retail systems had seven times more retail stores per capita than public systems. Private retail systems also sold on average 1.8 times more cannabis (measured in $CAD) than public systems in the month of September 2022.

When looking at individual jurisdictions, the researchers noted that Alberta, the province with a private system and also the most stores per capita, had 16.4 times more stores per capita than Quebec, a public system province with the fewest stores.

Is the Canadian cannabis bubble slowing down?

The study found that collectively, during the four years following legalization, the number of retail cannabis stores per capita in Canada increased by an average of 122% per year, with sales per capita also increasing by an estimated 91% annually. These average annual increases were greater within jurisdictions with a private retail system, compared to government-run public systems.

However, the researchers also found evidence to suggest that the increases in per capita stores and sales had begun to slow from October 2021 and onwards. While the market is still experiencing a net growth, it appears that the rapid retail expansion that was seen soon after legalization is now coming to an end.

Given the limited number of countries that have legalized recreational cannabis use, there are relatively little data for researchers to pull from when it comes to studying the longer-term impacts of widespread legalization measures. However, research from parts of the United States that have legalized cannabis does suggest that greater retail access to cannabis stores may be associated with more visits to local emergency departments. Further study of cannabis access via retail stores is warranted as the market matures, the researchers explain, in order to identify any potential health impacts or other public health trends.