Quebec started legalization with only a dozen cannabis stores to serve the whole province — or one for every 700,000 people.
So Quebecers who wanted to buy legal weed had a choice.
Or they could order from home online, in their pyjamas if they wanted to.
Overwhelmingly, they chose the harder path: 80 per cent of Quebec’s cannabis revenue has come from bricks-and-mortar retail stores.
In provinces with more retail, almost all cannabis buyers bought it in person: 94 per cent of sales in Nova Scotia and over 95 per cent in New Brunswick were in stores.
“There’s clearly a preference for Canadians to want the touch-and-feel aspect, wanting to go into a store and talk to somebody and sort of get their products, versus going online and buying it through an online channel,” says Deepak Anand, CEO of Materia Ventures, a cannabis supply and distribution company.
Across Canada, we see the same pattern: provinces that opened a large number of cannabis stores in October are selling a large amount, and those that didn’t, aren’t. Ontario, which to date has opened no stores at all, has Canada’s second-lowest cannabis sales per capita.
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“Clearly the system is not working from an online perspective in Ontario,” Anand says. “Alberta, on the other hand, is doing quite well.”
And while most provinces have attractive, reasonably well-stocked online cannabis sales sites, very few consumers seems to want to use them.
Experts said there were three main reasons for such a strong preference:
Being able to see and smell the weed
“It’s a sensory product,” says Brock University business professor Michael Armstrong. “If they’re going to a store, they can see the samples, they can sniff them in most provinces, and that can be part of the purchasing experience.
“It’s like buying groceries — you like to look at the produce and touch it. You get some information that way that you can’t get online.”
Both experienced and inexperienced buyers want to see and smell the cannabis, Anand says: experienced ones because they know what they’re looking at, and inexperienced ones because they don’t, and want to learn more.
“It’s a product that the average consumer hasn’t been using for a long time,” Anand says. “This is something new. They may have consumed it when they were in high school, but that was many years ago.
“On the other side, you have connoisseurs of the product that want to understand, just like you would want to go to a wine store and want to know a little bit more about your wine.”
Online shopping is convenient, but leaves a permanent trail of data in multiple places. In-person shopping can be done anonymously, with cash.
“You have to share your ID in a store, but one you’ve done that, there’s no record of you having been there,” Armstrong says. “You could pay in cash and walk out the door with your plain paper bag. People can see you going in and out of the store, but there’s nothing tracked.”
“Buying online means you have to set up an account of some sort on the website, you have to pay with a credit card, there are two sets of electronic records that potentially could track you.”
Credit card data on cannabis purchases is stored on servers in the United States, where it is available to federal agencies without the need for a warrant. Under U.S. law, people with any history of cannabis use, legal or not, can be banned for life — although since legalization, U.S. border officers seem to have had little interest in actually doing this.
There are few known examples of Canadians being banned for cannabis-related reasons since legalization. One concerned a man who was investing in an growing facility in Nevada; another involved a 73-year-old London, Ont. man whose 1976 conviction for simple possession showed up in a database.
In December, the federal privacy commissioner urged cannabis buyers to use cash if at all possible.
“Some countries may deny entry to individuals if they know they have purchased cannabis, even lawfully,” the statement cautioned.
In mid-October, U.S. border officials said they might bar Canadians from the U.S. for legal marijuana use in Canada if a border officer decides they are likely to consume it in the United States.
Talking to a human
New cannabis users, or people whose last experience was a dimly remembered episode from high school, want advice. And a website, however clever its graphics, isn’t going to play that role.
“Consumers are looking for information,” Armstrong says.
“They go online, but they don’t really know what to buy. There are all these products, but there’s almost no promotional material that would educate them and say, ‘Okay, this is the one you want for a high, this is the one you want for a buzz,’ that kind of thing. Going into a store and talking to the sales reps is one way to get some information about what I might like if I’m looking for this kind of effect.”
“People want to be able to understand, from people they can trust, how this is going to taste and feel, and how it will make them feel.”
B.C. is a special case
Armstrong says that the legal stores in B.C. are having to compete against a very entrenched grey market sector, which was tolerated for years before legalization.
“They actually have three sectors competing,” he says. “The legal stores that are setting up have to compete with not only the black market but also the grey market, where if you wanted to buy cannabis you could say, ‘There is no stigma. I know the police won’t arrest me at this point, the city has approved it, the product may not be tested but at least the stores should be inspected.'”
(Despite its well-known cannabis subculture, B.C. as a whole has quite low rates of use, by national standards.)