Hamilton Cannabis Market ‘Will Be Last In, First Out’

To get a sense of how two Hamilton cannabis shops are coping with growing market oversaturation, The Spectator reached out to both Relm Cannabis Co. and Crafted Nugs on King Street East.

These stores are located just steps from each other in International Village. Relm has been operating since December 2020, while Crafted Nugs opened its doors this March.

Speaking to The Spectator, Relm General Manager Alex Boxall said seeing another dispensary open just four doors down from his store worries him that they have been “set up for failure”, noting the immense costs of opening.

He also noted that a third dispensary, Village Cannabis, is located just a block further east.

“I’m worried about them as individuals and local small business owners,” Boxall said. “There is no possible way that three stores on this block can be profitable.”

He noted that since Crafted Nugs opened their doors, they haven’t seen any change in their customer base or sales.

“Cannabis users in general are loyal people,” Boxall said. “They tend to stick with the dispensaries they know.”

In an email response to questions from The Spectator, a manager at Crafted Nugs said they couldn’t answer questions about competition and oversaturation as they “have only been open for a little over two months.”

However, the manager noted that they have been “very pleased” with the growth of the store since it opened.

“To date, we have new customers coming in every day who are satisfied with our selection and prices,” the email reads. “We greatly appreciate everyone who comes into our store for the fact that they gave us a chance, regardless of whether they buy any products.”

Boxall said that one of the difficulties dispensaries face is their ability to differentiate themselves from one another, as they all order their product through the Ontario Cannabis Store (OCS).

They could differentiate themselves in price, that would mean “taking a shower with their margins,” he said.

“It’s essentially a forced race to the bottom,” Boxall said.

Crafted Nugs’ manager noted that “the best way to differentiate yourself and succeed” in the market is through product knowledge, customer service, a wide selection, competitive prices and a strong team.

Boxall compared the state of the market in Hamilton with that of the Wild West: first the boom, then the bust.

“He’s going to be the last in, the first out,” he said. “We will end up having a situation where we see empty storefronts on Main Street that used to be cannabis stores.”

Add Comment