ItB次元官网网址檚 hard to miss the smattering of cannabis store signs aiming to lure in customers with deep discounts and flashy membership programs along the stretch of Front Street East leading to TorontoB次元官网网址檚 St. Lawrence Market.

Outside Civilian House of Cannabis, one sign promises 15 per cent off and encourages membership to the Club Civilian loyalty program, which offers even more savings on marijuana and access to special events at owner Ink EntertainmentB次元官网网址檚 Rebel nightclub.

A few doors down at Canna Cabana, discounts are even steeper, hitting 70 per cent on accessories. The store promises B次元官网网址渦nbeatableB次元官网网址� prices and Canna Club members routinely pay anywhere from a few dollars to $50 less than market prices on some items.

While welcomed by customers, the promotions playing out along that strip B次元官网网址� and in many neighbourhoods across Canada B次元官网网址� signal an intensifying war on prices in the cannabis market.

The push to slash prices is so significant industry members worry how independent retailers and even some franchisees can stay in business.

B次元官网网址淭hereB次元官网网址檚 a lot of independent retailers who have mortgaged their house, they put all their savings into their store, and itB次元官网网址檚 such an oversaturated competitive market,B次元官网网址� said Lisa Campbell, cannabis marketing company Mercari AgencyB次元官网网址檚 CEO.

B次元官网网址淧rice is the key to success in these areas, and weB次元官网网址檙e seeing quite a few stores close as a result of lowering margins for the retailers.B次元官网网址�

In some regions, like Ontario, stores must order cannabis from provincial pot distributors like the Ontario Cannabis Store, but have flexibility over how much to charge consumers.

The average price for cannabis was $11.78 per gram at the start of 2019, shortly after legalization, but fell to $7.50 per gram in 2021, a November report from Deloitte Canada and cannabis research firms Hifyre and BDSA said.

The average price for vape cartridges has similarly fallen by 41 per cent from $32.02 per gram around legalization to $19 per gram a year later.

The report showed price is the leading factor contributing to Canadian cannabis sales, with 34 per cent of consumers naming it their top consideration.

Though much of the push for lower prices is led by an industry desperate to squeeze out illicit dealers and dispensaries, the explosion of pot shops is also a trigger.

Ontario alone has 1,333 stores and with all hawking the same items, standing out has never been tougher and loyalty programs, which are mostly free to sign up, have never made more of a difference.

Canna Cabana, for example, found same-store sales rose by 48 per cent since its loyalty programB次元官网网址檚 October launch.

B次元官网网址淓verybody has a loyalty program and itB次元官网网址檚 so competitive that itB次元官网网址檚 kind of required or I felt that it was,B次元官网网址� said Sean Kady, co-founder of Cosmic Charlies, a Toronto cannabis shop.

B次元官网网址淲eB次元官网网址檙e all selling the same productsB次元官网网址� so itB次元官网网址檚 hard to differentiate. Price is the main thing for consumers.B次元官网网址�

Cosmic CharliesB次元官网网址� loyalty program is a stamp card called Cosmo Pass that gives members 10 per cent off their first purchase for signing up. Then, every 11 purchases, they get 20 per cent off.

In the six months since its launch, customers have responded well and Kady said he sees an uptick in visits when members are notified of new promotions.

But itB次元官网网址檚 B次元官网网址渄auntingB次元官网网址� to keep up with competitors, he said.

Many give discounts for seniors and veterans, some like Tokyo Smoke offer $2 deals every Wednesday and price matching is common too.

Campbell saw many stores resisting such incentives since cave because inflation climbed to a near 40-year high and customers increasingly sought the lowest prices.

TheyB次元官网网址檙e most often found at Canna Cabana. The High Tide Inc.-owned chain with 128 stores across five provinces is staying ultracompetitive with its Cabana Club, a lowest price guarantee and lottery style scratch cards promising up to $850 in prizes.

Campbell feels the chain is B次元官网网址渃rushing the game,B次元官网网址� while Kady calls it B次元官网网址渁 beast.B次元官网网址�

A recent visit to one of its Toronto locations showed 14 grams of MTL CannabisB次元官网网址� Sage nB次元官网网址� Sour dried flower selling for $85.47 for members, 32 per cent less than the $125.99 market price and 26 per cent less than the $114.97 it was listed for at the Ontario Cannabis Store.

The company is able to offer such steep cuts because it got out of the wholesale business, so it could pass on discounts to customers, said High Tide CEO Raj Grover.

Those discounts will expand, when he launches Cabana Elite, a paid version of the Cabana Club loyalty program later this year.

Is he worried about copy cats? No, said Grover.

B次元官网网址淲eB次元官网网址檝e always been innovative B次元官网网址� and I donB次元官网网址檛 really pay too much attention to what the next guy is doing,B次元官网网址� he said. B次元官网网址淲e just put our head down.B次元官网网址�

Jaclynn Pehota, executive director of the Association of Canadian Cannabis Retailers, sums up whatB次元官网网址檚 happening in the industry as a B次元官网网址渞ace to the bottomB次元官网网址� that will have many victims.

B次元官网网址淚t is impossible for a privately-held small business to compete with a national, publicly-traded company that is backed by international funding,B次元官网网址� she said.

B次元官网网址淚t is a ludicrous proposition.B次元官网网址�

She suspects many of the big cannabis chains are adopting a Starbucks-like model, where they flood the market with stores, eventually cutting out the competition and becoming the dominant player.

She foresees many businesses closing, as a result, and consumers feeling the brunt.

B次元官网网址淲eB次元官网网址檙e going to see a much less vibrant and colourful market and much narrower spectrum of brands that are functioning,B次元官网网址� Pehota said.

B次元官网网址淚 personally donB次元官网网址檛 believe in the long term thatB次元官网网址檚 going to be a positive thing for the Canadian cannabis consumer.B次元官网网址�

Tara Deschamps, The Canadian Press

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