Cannabis industry a boon to local economies
Canada’s largest cannabis producers are being credited with micro-booms in some local economies, and the trickle-down effects are visible in nearby housing sales and price increases, according to realty firm ReMax. The trend is more pronounced in eastern Canada, where there’s a greater number of large-scale cannabis producers.
Smiths Falls, Ont. is one such market transformed by Canopy Growth, the largest cannabis producer in the world. After taking over the abandoned Hershey factory, the Ottawa-area production facility now employs 1,300 people and has a market value of more than $11 billion.
“The impact of Canopy Growth on Smiths Falls cannot be understated, and it’s growing,” says Christopher Alexander, executive vice-president and regional director, ReMax of Ontario-Atlantic Canada. “The economy in the Rideau-St. Lawrence area is experiencing a boom, which is triggering home sales, which rose by 27.1 per cent year-over-year, and average prices increased 10.5 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.”
Markets to watch include Windsor-Essex, where Aphria has set up shop in nearby Leamington and employs 1,000 people. The region saw September 2019 home sales increase 7.82 per cent and average prices rise 9.10 per cent year-over-year. In Atlantic Canada, the area surrounding Wentworth, NS will be of interest, where Breathing Green Solutions operates. Similarly, Atholville, NB is also experiencing a renaissance, thanks to Zenabis Global Inc., employing more than 420 people from the town and neighbouring communities ReMax says.
“The legal cannabis industry is already being credited with invigorating some lagging economies and as a result, those housing markets could soon see a flurry of activity,” Alexander adds.
While eastern Canada appears to be a hot spot for cannabis producers, and western Canada has some large-scale facilities, the west is seeing a much heavier influx of cannabis retailers compared to Ontario and Atlantic Canada. Calgary alone has more than 50 retail locations and Greater Vancouver has 23, whereas Toronto has only six. None of these markets have seen a meaningful impact on real estate activity or values. This is despite the results of a ReMax consumer survey, which found that 65 per cent of Canadians would not like to live near cannabis retail stores.
“It appears that there were a lot of anticipated reservations surrounding cannabis retail and the negative impacts on local property values that did not come to pass,” says Alexander. “We have not seen a decrease in home sales or prices that can be attributed to legal cannabis. In fact, the opposite may be true. As the retail footprint grows and diversifies into edibles and other formats, buyers and sellers may start to feel less resigned.”
A ReMax consumer survey found that two in 10 Canadians already live in proximity to a cannabis retailer, and 72 per cent of respondents say living near one is not a factor in their decision to move.
“The increasing number of retail cannabis stores in Calgary shows no signs of stopping, with city officials having approved more than 200 since legalization,” says Elton Ash, regional executive vice-president, ReMax of Western Canada. “The presence of more stores may influence how home buyers approach certain neighbourhoods.”