A report by Re/Max says 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, says Re/Max.
In Smiths Falls, Ont., the abandoned Hershey factory was acquired by Canopy Growth, the largest cannabis producer in the world. It 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, EVP 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, Ont. and employs 1,000 people, says the report. 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, N.S. will be of interest, where Breathing Green Solutions is in operation, Re/Max says. Similarly, Atholville, N.B. 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 says.
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, says Re/Max. 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 conducted by Leger found that 21 per cent of Canadians already live in proximity to a retail outlet and 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 EVP, 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,” says Ash. “But for the time being, acceptance and adoption seems to have been pretty positive.”
The survey says just 31 per cent of respondents say that having a retail cannabis store in the neighbourhood would deter them from purchasing a home. Twenty-five per cent say they would move if a cannabis store opened up in their neighbourhood, but 44 per cent say they would like to live near a cannabis store.