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Lack of retail shops puts a damper on sales

Pot challenges plague biz

The bohemian Toronto neighbourhood of Kensington Market has long been a hotspot for weed culture and home to pot lounge Hotbox Cafe, and yet — one year after the legalization of recreational cannabis in Canada — there still isn't a single legal weed retailer here.

It's not for lack of trying.

Once the Ontario government switched the pot store model from public to private last September, Hotbox owner Abi Roach started to prepare her own store, as well as two other Toronto locations.

After spending hundreds of thousands of dollars, the long-time pot legalization advocate learned that the province's retail licences initially would be limited to just 25 and allocated by random lottery in January — and her entry didn't win.

The Hotbox was also one of at least 16 Kensington Market area locations entered into the Ontario regulator’s second lottery in August for another 42 stores — and not one was chosen.

"A small company like mine, which doesn't make a lot of money, we spent close to half a million dollars getting ready three stores for applications... We lost all our savings," Roach said.

It's an example of the pot retail challenges that continue to plague Canada’s biggest province, where the number of legal shops per capita remains far lower than in most other parts of the country.

And as the country marks one year since legalization on Oct. 17 and prepares for new pot products such as topicals and edibles to hit shelves, cannabis stocks have come down from their highs as licensed producers miss their revenue targets — the blame for which some companies have put on the scant number of retail stores, particularly in Ontario.

Across the country, there are more than 500 licensed cannabis providers authorized to sell pot, though not all are up and running. That's compared with approximately 100 pot shops that opened on legalization day last year.

Initial product shortages and supply chain issues have largely been resolved, but consumer access to legal pot remains patchy between provinces and territories, and the black market continues to thrive.



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