Ontario cannabis stores expected to each take in $1.25M a month
That estimate by a Brock university professor is probably low, says an industry expert
Legal Ontario cannabis shops will average as much as $1.25 million per month in sales when they open in April, says a Brock university business expert.
And some insiders say that estimate is too low.
Michael Armstrong, an associate professor at Brock, says Quebec's dozen retail cannabis shops are making about $900,000 a month in sales, and they have lower prices than Ontario shops will.
Ontario's 25 stores — when prices, locations and population are factored in — should each be million-dollar-a-month businesses, he said.
"Obviously, it's going to vary," said Armstrong, who teaches in Brock's Goodman School of Business.
A cannabis store in Yorkdale, for example, will be more high end, while the St. Catharines store will be "more your neighbourhood pot shop." This will be good for business, he said.
"They should do pretty well," he said.
"If [a store] opens next week and they do $2 million in sales, it wouldn't surprise me."
Olivia Brown, a Hamilton cannabis consultant, says the higher number wouldn't surprise her either — locally, at least.
Hamilton police have had an ongoing battle trying to shut down illegal cannabis dispensaries. At one point, Brown said, there were more than 80. Most operated five to seven days a week, and on a good day brought in $80,000.
This windfall, police say, is a big reason dispensaries would pop up elsewhere after police shut them down.
In Ontario, 25 cannabis shops can open on April 1, although about half say they won't be ready yet. They're still wading through a lengthy approval process.
That includes Hamilton's Canna Cabana, which hopes to open at the Centre on Barton, and Hello Cannabis, which plans to open in Dundas. There's also a store planned for Niagara Falls and the north end of St. Catharines.
As of Tuesday, only one of the five planned Toronto shops had their retail store authorization from the province.
Once they open, Armstrong predicts, business will be robust.
Cannabis consumers seem to prefer buying in person rather than online, Armstrong said. In the last quarter, 80 per cent of Quebec cannabis sales happened at retail stores. So did 95 per cent of New Brunswick sales, and 94 per cent of sales in Nova Scotia.
In the last quarter in Ontario, people could buy only from the province's Ontario Cannabis Store website. Still, only about 13 per cent of cannabis sold in Ontario in that time was legal, Armstrong said.
As for how ready the store owners will be, "I think you'll see different levels," he said.
"Even the ones that do open next week, even if they have all their ducks in a row, they'll find out how well they did with training their staff, and if the software works the way they wanted. I'm sure we'll see lots of little bumps in the first couple of weeks."