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 a report by RE/MAX Canada.
This trend is more pronounced in Eastern Canada, where there’s a greater number of large-scale cannabis producers, says the report.
Smiths Falls, Ontario 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, RE/MAX 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.”
Some markets to watch include Windsor-Essex, where Aphria has set up shop in nearby Leamington, Ontario and employs 1,000 people. The region saw September 2019 home sales increase 7.82 per cent and average prices rose 9.10 per cent year-over-year. In Atlantic Canada, the area surrounding Wentworth, Nova Scotia will be of interest, where Breathing Green Solutions is in operation. Similarly, Atholville, New Brunswick is also experiencing a renaissance thanks to Zenabis Global Inc., employing more than 420 people from the town and neighbouring communities.
“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 RE/MAX 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. We have not seen a decrease in home sales or prices that can be attributed to legal cannabis,” says Alexander. “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.”
The RE/MAX consumer survey found that two in 10 Canadians (21 per cent) already live in proximity to one and most of them (72 per cent) 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, RE/MAX of Western Canada. “The presence of more stores may influence how home buyers approach certain neighbourhoods.”