Dimensions of competition in urban cannabis markets

Abstract

AbstractWe report the results of a survey of legal cannabis retail operators in the two largest urban centres of a Canadian province that uses a fully private model to determine the dimensions of competition between retail outlets. We find that, in addition to expected price and location competition, customer loyalty is central in the opinion of retailers. Firms also did not see the illicit market as their primary competition, instead identifying nearby legal retailers as their main competitors. Restrictions on advertising loomed large in the minds of retailers as a policy‐based impediment to their success. These results are further supported by visual inspection of the exterior of all stores in one of the urban centres.