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Although the cannabis industry has faced its fair share of regulatory and economic challenges over the past year, the COVID-19 pandemic seems to have pushed businesses to new heights.
As the public became more health-conscious, we’ve seen a rise in demand for holistic products like CBD, which naturally resulted in significant profit increases for many cannabis businesses. Of course, it did not hurt that many cannabis stores have been recognized as essential services, so businesses in the niche remained largely operational through the year.
To get a glimpse into the success of the cannabis market and the Canadian retail CRE in the face of the pandemic, we do not have to look any farther than Canada’s own largest recreational cannabis retailer – High Tide.
High Tide Introduced Its 76th Nationwide Store
High Tide, with its retail segments including NewLeaf Cannabis, Meta Cannabis Supply Co., Meta Cannabis Co., Canna Cabana, and KushBar, has had quite a successful year despite the challenges presented by the pandemic. This March, High Tide opened a brand new Canna Cabana retail store in London, Ontario, making this location its 76th nationwide store.
Located at 760 Hyde Park Road, Canna Cabana is the first High Tide store in London, Ontario. It offers recreational cannabis and relevant accessories for all adult users.
The new Canna Cabana store is just the beginning for High Tide, which has massive expansion plans. According to Raj Grover, president and CEO of High Tide, the company’s “committed to reaching the current provincial maximum of 30 locations before the end of September 2021.”
New Retail Approaches in the Midst of COVID-19
Like many retail businesses, those in the cannabis industry had to also adopt innovative retail solutions in order to turn a profit. Although these changes were forced due to government restrictions, they proved to be quite positive for cannabis retailers.
The COVID-19 pandemic has accelerated the global shift to e-commerce, forcing businesses to adapt to new technologies and start using them to their own advantage. With national lockdowns and countless closures, businesses’ only way to thrive was by offering seamless online experiences to their consumers.
Online orders and home deliveries (where possible) helped many businesses stay afloat, and as the pandemic continued, retailers developed ever-more innovative approaches. Curbside pickup became a simple solution for businesses that could not offer home deliveries, and drive-thru windows started popping up across Ontario, attracting consumers like never before.
The year-long pandemic has completely altered the consumers’ shopping behaviours, getting them accustomed to the convenience of online shopping, curbside pickups, and drive-thru windows. These changes are likely here to stay, as they continue to help bring in more business for retailers; however, once COVID-19 has been dealt with, we expect to see a greater balance between online and in-store shopping. With many retailers continuing to have a need for their brick-and-mortar locations.
The cannabis retail market has proven that merging technology with retail will not reduce the need for physical locations, it actually increases the need for more physical locations. This is why many cannabis retailers are expanding their physical store locations across provinces, at the same time as improving their e-commerce portion of their retail business.
Investors that understand which retail niches are thriving and why, can improve the performance of their CRE retail investments by working the niches.