MONTREAL ― The recreational cannabis industry has been very good to some small cities in Canada, which are experiencing a “micro-boom” in their housing markets, a new report has concluded.
The report from real estate brokerage Re/Max ― released a few days ahead of the one-year anniversary of legalization ― points to a number of locations, particularly in central and eastern Canada, as boom towns to watch.
One it highlights is Smiths Falls, Ont., some 80 km southwest of Ottawa and home to a cannabis facility owned by Canopy Growth, one of the largest cannabis companies in the world.
That facility ― once a shuttered Hershey’s chocolate plant ― now employs more than 1,300 people, and the result is that home sales have jumped 27 per cent in that town and the average selling price is up more than 10 per cent.
“Demand is up and there’s a housing shortage in the region. We expect to see similar cannabis industry-related growth in other regions, as well,” said Christopher Alexander, executive vice-president and regional director at Re/Max Ontario-Atlantic Canada.
The report also points to Leamington, Ont., where Aphria has a facility that employs 1,000. Home sales are up seven per cent and prices have increased nine per cent over the past year.
The report also highlights Wentworth, N.S., and Altholville, N.B. as “markets to watch” thanks to growing operations in those areas.
So far, the economic impact of legal cannabis has been stronger in small communities, which makes sense, given that one grow-op can make a big difference in a small town.
In larger cities, the impact hasn’t been as noticeable, but Alexander thinks that could change. He notes that very few legal stores have opened so far in many larger cities, including Toronto ― just six legal stores, compared to some 50 in Calgary.
Once Ontario retail operations catch up to other provinces, he expects some producers will set up shop to be close to customers.
“Sales will probably increase and you’ll see more and more companies moving in,” Alexander said in an interview with HuffPost Canada.
“I would have to think that Toronto is at some point is going to get in the game. At some point, somebody’s going to see that as an opportunity and go for it.”
He still sees a lot of upside for the economy, and for housing markets, as the cannabis industry matures.
“There’s still a lot of stigma attached to cannabis. It’s not fully socially acceptable still, so it’s going to have a ways to go.”
A consumer survey carried out by Leger for Re/Max found that two in 10 Canadians already live near a cannabis retail outlet.
And while some seven in 10 say it wouldn’t be a factor in any decision to move, 31 per cent say a cannabis store nearby would discourage them from buying a home, while a quarter said they would move if one opened up.
But not everyone is negative about the idea. Forty-four per cent of respondents said they would like to live near a cannabis store.
“It will be a really good revenue source for the country,” Alexander predicted, “and hopefully politicians and policymakers can put that revenue to good use.”