TORONTO, Sept. 22, 2022 Unfortunately due to the rise of cannabis store closures on the horizon in the Ontario cannabis marketplace, Leafythings has discovered the lack of an efficient orderly closure program existing for struggling retailers and is proposing a retailer support program
Leafythings discovered that the wind-down process for an authorized retailer takes approximately two months. This delay is due to the inventory requirements retailers must execute to maintain their accountability. For retailer store owners, this process is deepening the losses for owners with an additional two more months of rent, two more months of insurance and two more months of labour and other overhead costs.
In the case of Lagoo Cannabis that was already in default by one month, the current regulations are illogical and increase the losses of store owners.
“The math just didn’t make sense any longer,” said Levon Kostanyan, owner and operator of Lagoo Cannabis. “I understand when the legislation was designed, it wasn’t designed to accommodate a failing retailer, but this was more than a failure. I simply didn’t have a partner in the industry.”
“It wasn’t the unregulated market that made my business fail, it was my $2,000 – $3,000 orders that came with a $200 delivery fee. Multiple times per month. It was the aggravations due to interruptions in the supply chain and ordering process. It’s not the roughly $10,000 it is going to cost me to renew my retail store authorization every two years. Quite frankly, the OCS sells the products they sell to me for cheaper than I can sell them to my customers.”
“I understand the argument that the liquor store sells a bottle of liquor for $40 and the bar or restaurant sells it for $240, but the difference is that the bar and restaurant can create an experience. They can glamourize, they can sensationalize, and they can promote a lifestyle. To be honest, I have to have a storefront that is opaque or has no line of site to a minor. The entire experience I wanted to create in my store was sterilized, from the packaging of the products to the energy of the store. I was competing directly with the OCS with absolutely no ability to differentiate myself or market myself.”
“From the beginning the application process took me eight months. I paid and rent and insurance for 8 months. I still cannot open a tier one Canadian bank to process my sales. I have to use a Credit Union that charges me $700 per month just for access to a basic account.”
“We clearly saw a problem brewing,” said Jeffrey Neil, Leafything’s Director of Community Engagement. “I just knew we could find a solution to help all key stakeholders. Leafythings will begin its Retail Cannabis Store Support Program by buying all available inventory from stores who wish to wind down in a timely fashion. Store owners we have spoken to have literally cried and were so thankful that we could help them in this way.”
“Being a technology platform and experiential exhibitor, this also provides us the ability to get great Canadian cannabis products to the consumer. We will be sharing and gifting these products at all of our events and exhibitions.”
Leafythings most recently secured a private investment of $8 million to assist with acquisitions and experiential programs.
“I was extremely thankful for their assistance,” said Levon. “Leafythings has acted like a partner for me. Sometimes my leads came from the Leafythings mobile platform. It has been quite a journey. I think I expected the cannabis industry to work like all other industries and I was wrong. I do hope that the regulated and unregulated markets eventually make their way to a retailer’s shelf, so an operator would be able to offer a more tailored, curated experience, providing a more comprehensive product selection that has some familiarity.”
Leafythings is empowered by a mission to help bridge the gap between consumers and businesses while supporting public health initiatives. Leafythings helps consumers find and access quality cannabis products in Canada through highly localized strategies and public education in efforts to collaboratively shatter social equity barriers in the market and improve public perception of the industry.
(This information is primarily sourced from Leafythings Canada. Highly Capitalized has neither approved nor disapproved the contents of this news release. Read our Disclaimer here).