A major problem underlying the cannabis industry’s continuing financial struggles has been overcapacity. In provinces that allow private retailers, there are too many shops competing for too few customers to cover costs. And nationwide, producers have been making more cannabis than the retailers need.
Four years ago, the industry looked promising. In 2019, Ontario’s first 24 licensed cannabis shops opened with a bang. Those privately-owned retailers initially averaged about $1-million in monthly sales each, thanks to minimal legal competition and average prices above $12 a gram.
