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Proximity Matters: How Distance Impacts Cannabis Consumer Choices

Have you ever wondered how the distance between retailers and consumers can influence the choices people make when buying cannabis products?

A recent study conducted in Canada’s regulated cannabis market provides intriguing insights into this question. The research, which is scheduled for publication in the prestigious Journal of Studies on Alcohol and Drugs, involved an in-depth analysis of data from over 15,000 Canadian cannabis users who actively participated in the International Cannabis Policy Study. With such a large and diverse dataset, the study’s findings offer robust and reliable conclusions about the preferences and behavior of cannabis consumers across the country.

To investigate the impact of proximity to regulated cannabis stores on consumer choices, the researchers used sophisticated geographical data analysis techniques. They calculated the distance between each participant’s residence and the nearest brick-and-mortar government-regulated cannabis store. By meticulously analyzing the sourcing patterns of marijuana users, including obtaining cannabis from various sources like regulated stores, illicit channels, regulated websites, illegal websites, dealers, home production, or through family and friends, the study provides comprehensive insights into the complex dynamics of the cannabis market.

The results of the study revealed a compelling relationship between proximity to regulated cannabis stores and consumers’ purchasing decisions. People who resided within approximately 1.9 miles (roughly 3 kilometers) of a legal dispensary were significantly more likely to opt for the regulated market when buying cannabis products. The convenience of having a store nearby seemed to drive consumers towards the legal market, making it the preferred option for those living in close proximity.

On the other hand, Individuals residing farther away from regulated stores were less likely to make purchases from legal sources. Instead, they were more inclined to explore alternative channels, such as obtaining cannabis from regulated websites or even growing their own at home. This suggests that accessibility plays a crucial role in shaping consumer behavior within the cannabis industry.

Interestingly, the researchers also uncovered a fascinating diminishing effect concerning the distance to regulated cannabis stores. In provinces like Alberta, where a higher number of cannabis stores per capita exist due to an open market for private-sector retail, legal purchases from regulated stores were more common. However, the difference in legal purchases between provinces with more stores (e.g., Alberta) and provinces with fewer stores (e.g., Quebec) was relatively modest. This indicates that the proximity of just one regulated store can be sufficient to attract consumers to the legal market, even in regions with fewer retail options.

Moreover, the study revealed an evolving trend over time. Respondents in 2021 were found to live closer to regulated marijuana stores compared to 2019. This finding points to a significant rise in adult-use marijuana stores across Canada during that period. As a consequence, regulated stores became the primary source for cannabis in 2020 and 2021, surpassing family and friends, which held the position of the preferred option in 2019.

The implications of this study underscore the critical role of location and convenience in the cannabis retail industry. For cannabis retailers, these findings provide valuable insights into consumer behavior and preferences, helping them strategically plan store locations to maximize legal market sales.

However, it’s important to acknowledge that while the research established a correlation between proximity to regulated cannabis stores and consumer choices, other factors, such as profitability and market demand, are also crucial for retailers’ success in the highly competitive cannabis landscape. Understanding the interplay of these various factors is vital for businesses to thrive in the ever-evolving cannabis market.

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