Big cannabis producers are a boon to local economies, boosting home sales and prices in some markets; cannabis retail NIMBYism lurks with few real effects
TORONTO and KELOWNA, Oct. 15, 2019 /CNW/ - 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. This trend is more pronounced in Eastern Canada, where there's a greater number of large-scale cannabis producers.
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."
A 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."
"Even with changed attitudes, however, the idea of NIMBYism still looms in the background," adds Ash. "But for the time being, acceptance and adoption seems to have been pretty positive. The market is expected to expand even further with the legalization of topicals and edibles in December of this year, which could pave the avenue for even greater growth of the industries associated with legal cannabis. There's clearly an appetite for it."
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Key Findings from the 2019 RE/MAX Cannabis Survey
- Two in 10 (21 per cent) of Canadians live near a cannabis retail store.
- Among those already living near a cannabis store:
- Most Canadians (72 per cent) believe that living near one is not a factor in deciding to move
- Almost a third (31 per cent) say that having a retail cannabis store in the neighbourhood would deter them from purchasing a home
- 25 per cent would move if a cannabis store opened up in their neighbourhood
- 44 per cent say they would like to live near a cannabis store
Leger is the largest Canadian-owned full-service market research firm. An online survey of 2003 Canadians (excluding Quebecers) was completed between February 4-10, 2019, using Leger's online panel. LegerWeb. Leger's online panel has approximately 400,000 members nationally and has a retention rate of 90%. A probability sample of the same size would yield a margin of error of +/- 2.2%, 19 times out of 20. Millennials are defined as Canadians aged 18 to 34 years of age.
*NIMBY: Acronym for "Not In My Back Yard," refers to the opposition by residents to proposed developments within their area.
About RE/MAX INTEGRA and RE/MAX of Ontario-Atlantic Canada
RE/MAX INTEGRA, founded in 1980, is a privately held company by Canadian entrepreneurs. With regional headquarters in Mississauga, Boston, Minneapolis, Indianapolis, Zug and Vienna, RE/MAX INTEGRA represents nearly one-third of all RE/MAX Sales Associates worldwide, now numbering more than 42,000. The company was founded on the premise of providing outstanding service and support both at the regional level and to the end consumer. The Ontario-Atlantic Canada region has 11,300 quality Associates. The US regions — New England and the Midwest (including Minnesota, Wisconsin and Indiana) – have 2,660 and 4,200 Associates respectively. The European region leads with more than 24,000 Associates. For more information, visit remaxintegra.com and remax.ca
About the RE/MAX Network
RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. Over 125,000 agents provide RE/MAX a global reach of more than 110 countries and territories. RE/MAX is Canada's leading real estate organization with more than 20,000 Sales Associates and over 900 independently-owned and operated offices nationwide. RE/MAX, LLC, one of the world's leading franchisors of real estate brokerage services, is a subsidiary of RE/MAX Holdings, Inc. (NYSE: RMAX). With a passion for the communities in which its agents live and work, RE/MAX is proud to have raised millions of dollars for Children's Miracle Network Hospitals® and other charities. For more information about RE/MAX, to search home listings or find an agent in your community, please visit www.remax.ca.
Forward looking statements
This report includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "believe," "intend," "expect," "estimate," "plan," "outlook," "project" and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. These forward-looking statements include statements regarding housing market conditions and the Company's results of operations, performance and growth. Forward-looking statements should not be read as guarantees of future performance or results. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Such risks and uncertainties include, without limitation, (1) changes in business and economic activity in general, (2) changes in the real estate market, including changes due to interest rates and availability of financing, (3) the Company's ability to attract and retain quality franchisees, (4) the Company's franchisees' ability to recruit and retain real estate agents and mortgage loan originators, (5) changes in laws and regulations that may affect the Company's business or the real estate market, (6) failure to maintain, protect and enhance the RE/MAX and Motto Mortgage brands, (7) fluctuations in foreign currency exchange rates, as well as those risks and uncertainties described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") and similar disclosures in subsequent SEC filings. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.
SOURCE RE/MAX Canada
For further information: and to coordinate interviews, please contact: Marc Dodsworth, O: 416-934-2128, E: [email protected]; Lydia McNutt, O: 905-301-5980, E: [email protected]; Kayley Jackson, O: 250-860-3628, E: [email protected]