Canada’s largest cannabis producers have boosted home sales and prices in some eastern markets.
Smiths Falls, Ont., is one such market transformed by Canopy Growth, the world’s largest cannabis producer. The Ottawa-area production facility now employs 1,300 people and has a market value of over $11 billion.
"The impact of Canopy Growth on Smiths Falls cannot be understated, and it's growing," said Christopher Alexander, RE/MAX of Ontario-Atlantic Canada’s executive vice president and regional director. "The economy in the Rideau-St. Lawrence area is experiencing a boom, which is triggering home sales, which rose by 27.1% year over year, and average prices increased [by] 10.5%. 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. The region saw September home sales increase by 7.82% and average prices rose by 9.10% year over year. In Atlantic Canada, the area surrounding Wentworth, NS, will be of interest, where Breathing Green Solutions is in operation. Atholville, NB, has also experienced a renaissance thanks to Zenabis Global Inc., which employs 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 said.
While eastern Canada appears to be a hot spot for cannabis producers, the west is seeing a much heavier influx of cannabis retailers. Calgary alone has over 50 retail locations and Greater Vancouver has 23, while 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 survey, which found that 65% of Canadians would not like to live near retail cannabis 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," Alexander said. "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."