Home > Boards > Canadian > Cannabis > Fire & Flower Holdings Corporation (TSX:FAF)

As more and more cannabis stores open, some

Public Reply | Private Reply | Keep | Last ReadPost New MsgNext 10 | Previous | Next
FUNMAN Member Profile
Member Level 
Followed By 105
Posts 24,142
Boards Moderated 12
Alias Born 08/03/10
160x600 placeholder
Fire & Flower to Announce Fourth Quarter and Fiscal Year 2020 Financial Results PR Newswire (Canada) - 4/20/2021 6:00:00 AM
Fire & Flower to Webcast Live at VirtualInvestorConferences.com April 20 PR Newswire (Canada) - 4/19/2021 6:00:00 AM
Cannabis Industry Investor Conference: Company Executives Present April 20th PR Newswire (Canada) - 4/16/2021 8:35:00 AM
Fire & Flower Releases World's First Non-Fungible Toke in Celebration of 420 PR Newswire (Canada) - 4/14/2021 9:38:00 AM
Cannabis Industry Investor Conference: Company Executives Present April 20th PR Newswire (US) - 4/14/2021 8:35:00 AM
Fire & Flower Subsidiary Hifyre Enters into Strategic Agreement with Leading U.S. Analytics Company BDSA PR Newswire (Canada) - 3/10/2021 6:00:00 AM
Fire & Flower Announces Planned Debt-to-Equity Conversion PR Newswire (Canada) - 3/2/2021 6:00:00 AM
Fire & Flower Enters U.S. Cannabis Market Through Strategic Licensing Partnership and Acquisition Option with American Acres PR Newswire (Canada) - 2/22/2021 6:00:00 AM
Fire & Flower Announces Application to List on NASDAQ PR Newswire (Canada) - 2/16/2021 6:00:00 AM
Fire & Flower Announces Completion of $15 Million At-The-Market Equity Offering PR Newswire (Canada) - 2/10/2021 6:00:00 AM
Fire & Flower Reaches Milestone of 200,000 Spark Perks™ Members PR Newswire (Canada) - 2/1/2021 6:00:00 AM
Fire & Flower Expands Third-Party Gift Card Program to Additional Retail Locations including Circle K Stores in Ontario, Albe... PR Newswire (Canada) - 1/25/2021 6:00:00 AM
Fire & Flower Expands Free Same-Day Delivery Across Its Ontario Network PR Newswire (Canada) - 1/18/2021 6:00:00 AM
Fire & Flower Announces Alimentation Couche-Tard's Exercise of 10,505,779 Series A-2 Warrants PR Newswire (Canada) - 12/21/2020 6:00:00 AM
Fire & Flower Announces Third Quarter 2020 Financial Results and Achieves Positive Adjusted EBITDA PR Newswire (Canada) - 12/15/2020 6:00:00 AM
Fire & Flower to Announce Third Quarter 2020 Financial Results PR Newswire (Canada) - 12/8/2020 6:00:00 AM
Fire & Flower Announces At-The-Market Equity Financing Program to Provide Flexible Access To Growth Capital PR Newswire (Canada) - 12/3/2020 9:59:00 AM
Fire & Flower Completes Acquisition of Friendly Stranger, Happy Dayz and Hotbox Retail Chains PR Newswire (Canada) - 12/2/2020 6:00:00 AM
Fire & Flower Enters into Agreement to Acquire College Street Cannabis Store PR Newswire (Canada) - 11/30/2020 6:00:00 AM
Fire & Flower Restores E-Commerce & Delivery in Ontario To Safely Service Customers Following New Lockdown Orders PR Newswire (Canada) - 11/23/2020 6:15:00 AM
Fire & Flower Clarifies Forward-Looking Information PR Newswire (Canada) - 11/6/2020 5:15:00 PM
Fire & Flower to Acquire Leading Ontario Cannabis Retailer Friendly Stranger Holdings Corp. PR Newswire (Canada) - 11/2/2020 6:00:00 AM
Fire & Flower Announces Acquisition of Three Cannabis Retail Stores in the Greater Toronto Region PR Newswire (Canada) - 10/15/2020 6:00:00 AM
Fire & Flower Announces Private Label Brand Collaboration with Qwest PR Newswire (Canada) - 10/14/2020 6:00:00 AM
Fire & Flower Announces the Opening of its Toronto - Parkdale Cannabis Retail Store PR Newswire (Canada) - 9/23/2020 6:00:00 AM
FUNMAN Member Level  Saturday, 02/27/21 10:21:18 AM
Re: Diogenes of Sinope post# 272
Post # of 299 
As more and more cannabis stores open, some ask: How many can stay in business?

By: Patrick Cain
Data Journalist@Cain Contact

Published Thursday, February 25, 2021 1:45PM EST
Last Updated Thursday, February 25, 2021 3:56PM EST

https://www.ctvnews.ca/business/as-more-and-more-cannabis-stores-open-some-ask-how-many-can-stay-in-business-1.5322576

TORONTO -- If there’s one thing the western stretch of the Danforth, a busy street in Toronto’s east end, suddenly isn’t short of, it’s cannabis stores.

First it was Canvas, a brightly lit store in a former diner, part of a small local chain. Then, ten minutes’ walk down the street, Friendly Stranger, owned by national chain Fire & Flower, opened up shop. Then Green Merchant, part of a small local chain, opened a store across the street from the Friendly Stranger.

Finally, Canopy Growth, owner of retail chain Tokyo Smoke, confirmed this week to CTVNews.ca that they plan to open a fourth store in the neighbourhood, just across from Canvas.

Ontario, which has lagged far behind other provinces in opening cannabis retail stores – with an outsized effect on the national legal cannabis market, which for a long time lagged because of Ontario’s lack of stores – is now making up for lost time, slamming the accelerator on licensing new stores. Regulators there are now issuing 30 new authorizations a week, or one every hour-and-20 minutes of the working day.

At that rate, Canada’s most populous province will have 1,390 legal cannabis stores by October 1, or one for every 10,000 residents and two for every liquor store.

The pace of openings raises a couple of questions. How many legal weed stores can Canadian customers actually keep in business? If there is a shakeout, what will the survivors have in common?

Stores seek to form loyal customers, but rigid rules make it challenging
As in other retail businesses, observers we talked to said the key to success is developing relationships with loyal customers. - This is right up FFLWF's alley. - FUNMAN

But with all stores forced by law to deal with one monopoly wholesaler, and federal laws making marketing nearly impossible, it’s very challenging to figure out how to stand out from the competition.

“We have a few unique trends here,” said Shayne Ward, assistant manager at Green Merchant. “We have a rosin press that we’re using, so you can buy fresh flower, and we’ll press it into a concentrate for you. We also offer rolling services with a pre-roll machine.”

As well, he told CTVNews.ca the store will match any competitor’s price for a given product.

The problem with using these details as selling features, though, is that rigid advertising restrictions forbid the store from promoting them in the window. And with tight public health measures in place, customers who visit the store can only ‘click and collect,’ or pay in advance and pick up their purchases from the door with minimum interaction.

“Because of COVID, we are extremely limited in what we can do. Especially under this lockdown, we aren’t allowed to help customers at the door – it has to be over the phone, or online. It’s thrown a bit of a wrench into everyone’s plans, to be honest,” said Ward.

(Ward says he didn’t open across the street from Friendly Stranger on purpose: “We actually had this space reserved before they even got that rental space.”) Fear of a better operator? - FUNMAN

Adam Vassos, a spokesperson for Canvas, said the opening of competing stores didn’t seem to hurt sales.

“It didn’t really affect the business in any way,” he said. “To be perfectly honest with you, the more legal stores that you have, it improves business. It’s almost like a restaurant. You may have one restaurant on the street and it’s doing well, but then when more restaurants show up on the street, it becomes kind of a destination.”

Stores that are physically bigger will have an advantage, he says, since they have the space to store more products and therefore offer customers more variety. Beverages, for example, take up a lot of space, and the government-owned wholesaler only delivers once a week. (Stores aren’t allowed to store cannabis off-site.)

He predicts a winnowing-out process as the market matures.

“In the end the strong will survive, just like any industry, and the weak will not survive, unfortunately.”

Toronto-based cannabis lawyer Matt Maurer agrees.

“There are people – I don’t think it’s going to be a handful, I think it’s going to be more than that – that are going to spend hundreds of thousands of dollars going into this business and will have to close. There’s just not enough room for everyone. It’s bad in that sense, that this isn’t going to go well for everyone,” he told CTVNews.ca.


“Until the dust settles, it’s going to be hard. It’s going to be easier as we move ahead and we see how many are open and how many start closing. By the end of this year, we might start seeing some of those stores start to close.”

Some brands have worked very hard at standing out, and creating customer loyalty, by creating a specific look and feel in their stores, says Deepak Anand, CEO of Materia Ventures, a cannabis supply and distribution company.

“You’re seeing a few retailers like Superette, or West Coast Cannabis Store in B.C. and Alberta, that have done a really good job with respect to how the retail consumer is treated when they go onto a store,” he said. “That level of differentiation of customer service is going to be very important for the survival of a number of stores.”

That said, as the industry matures, he expects to see stores specialize: selling only edibles, or beverages, or high-end dry flower, or plants for home growers. I can definitely see this happening with beverages. - FUNMAN

‘Farm gate’ sales, in which customers are allowed to buy cannabis directly from growing facilities, will be a further source of competition in B.C. and Ontario, he said.

“If you have five retailers in a span of one block, I don’t know how that would continue to carry on with some unique differentiation,” Maurer said.

“It’s too early to see if that model works. Just because it’s around doesn’t mean that it works.”

“There are a few ways to make it through. If you’ve got a really great location, somewhat to the exclusion of other stores, you’re going to be okay. If you’ve got some good first mover advantage in your neighbourhood and you really take advantage of it and get customer loyalty, you might be okay. But if at a random intersection you’ve got a store on each corner coming up all at once, it’s going to be hard.”

How many cannabis stores are there room for? More than you might think, U.S. experience shows.

How many cannabis retail stores can Canadians keep in business? It seems that we’re in the process of finding out.

Alberta, Canada’s fastest province to open private-sector cannabis stores, now has one for every 7,478 residents. In B.C. it’s one to 16,346. Colorado has a legal store for every 9,587 people, and Oregon has one for every 5,698 people.

“Personally I think one store per every 10,000 people is probably a good area to be set at,” Anand says. “Having said that, three, four or five stores in one block is probably excessive.”

As for having two cannabis stores for every liquor store, Vassos points out that cannabis stores are typically much smaller.

As well, while alcohol buyers generally know what they want, pay for it and leave, cannabis buyers more often want to discuss the product.

“The difference between a (liquor store) and a cannabis store is that with a (liquor store) the products are on display,” he said. “You can walk in, pick up a bottle of vodka right off the rack and not have to speak to anybody. You can be in and out in a few minutes without any interaction with an employee except maybe the cashier.

“With a cannabis store, the products aren’t on display, it’s a relatively new product, so people need to spend the time on education. They don’t know the difference between a vape and an edible or a topical. There are so many different products. It’s a much longer transaction. For that reason, you need more stores.”

Residents of some neighbourhoods have objected to concentrations of cannabis stores on their main streets. But in practice, they don’t create problems, Maurer argued.

“We get people writing in and saying that there are already too many stores, with this sort of implication that the more stores there are, the more unsavoury characters are going to be drawn to the stores at all hours of the day to shop. But that’s not how these stores operate. They are 19 and over, you can’t see anything from the outside, you can’t really smell anything, because everything comes prepackaged.”

“When you’ve got bars and people spilling out at 2 a.m., and noise, and maybe fights on the street and traffic, and people urinating in the alleys and whatever else, those same concerns don’t exist for me with respect to cannabis stores.”

Public Reply | Private Reply | Keep | Last ReadPost New MsgNext 10 | Previous | Next
Follow Board Follow Board Keyboard Shortcuts Report TOS Violation
X
Current Price
Change
Volume
Detailed Quote - Discussion Board
Intraday Chart
+/- to Watchlist
Consent Preferences