Saskatoon weed shops outnumber Tim Hortons: Retailers struggle with market saturation

Five years ago, Canada legalized and regulated cannabis, to much enthusiasm from advocates and long-time users alike.

"I remember the day prior on the 16th we got our first shipment of cannabis," Living Skies Cannabis owner Cierra Sieben-Chubak said. "And that was really exciting because I thought, 'oh my gosh, it's not even legal yet and we have like a vault full of weed.'"

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The optimism of opening day stands in stark contrast to today, with many retailers struggling to grow their business.

Sieben-Chubak is one of many owners dealing with an oversaturated market and uncertainty around government regulation.

When Living Skies opened in 2018 there were six licensed retailers in Saskatoon. Now, there are nearly twice as many pot shops in the city as there are Tim Hortons.

There are 176 cannabis retailers in Saskatchewan, with 37 shops located in Saskatoon.

With more shops opening every year, Sieben-Chubak struggles to see how the industry can sustain itself.

"There's a ridiculous amount of cannabis stores in Saskatoon. I don't believe the number that we have is totally sustainable for our population. So that's definitely a big challenge," she said.

During the opening days, supply was scarce as the novelty took hold. Now, supply for any retailer is ample, and prices have dropped -- not only reflecting the market demand, but the competition between local stores.

"Getting to open up a cannabis store isn't a golden ticket. You really have to be competitive and try to stand out amongst your competitors, which is really tough to do when everybody has access."

Over the last year, the industry was marred by closures, consolidations and job losses.

In August, marijuana giant Aurora Cannabis saved more than $500 million by cutting jobs, closing facilities and diversifying into orchids. A week later, Canopy Growth sold its headquarters back to the company it originally bought it from as a cost cutting measure before laying off hundreds of workers later in the year.

Industry experts say government overregulation is partly to blame.

"Five years into this and we're in the '50s in terms of the percentage of the overall market we've absorbed," said George Smitherman, President of the Cannabis Council of Canada.

The council presented a three-point plan to make the sector profitable by reducing taxes, eliminating regulatory fees and increasing the allowable THC limit on edibles to 100mg from its current limit of 10mg.

"Ten milligrams really isn't much, especially when they can go to the legacy market and get things that are way higher than that at a very comparable price," Sieben-Chubak said.

She says the limit on edibles is driving more people to the black market rather than legal stores.

"If there's anyone in the headlong fight with the illicit market, it's the legal cannabis sector." Smitherman said.

Sieben-Chubak said the balance between safety and economics could use a review. She's unable to widely advertise products in her store and has to cover her store front in frosted glass so no minors see what's inside.

"They see alcohol on TV commercials for liquor but cannabis is sort of like this big no, no," she said.

Helping keep Living Skies profitable is the Saskatchewan Weed Pool, a cooperative of local cannabis shop owners across Saskatchewan, which helps with buying power.

The Cannabis Council of Canada says of all bankruptcy filings across the country in 2022, 40 per cent were by cannabis-related companies.

As Sieben-Chubak and other store owners realize their dream of cannabis riches is going up in smoke, retailers and industry experts are calling for reform to save a struggling industry.