Examining the Barriers to Licensed Private Cannabis Retailers in Canada: A Quantitative Content Analysis of Canadian News Media Coverage

In 2018, Canada introduced the Cannabis Act to protect public health and safety by controlling the adverse effects of cannabis use. Although there are recognized health risks linked to cannabis use, including physical and mental health concerns, as well as potential long-term effects such as adolescent brain development issues, psychiatric disorders, and cannabis dependency, the government has had to weigh these considerations with the challenges associated with unregulated use (Canadian Centre on Substance Use & Addition, 2019; Fischer et al., 2022; Hasin & Walsh, 2020). Research has shown that cannabis products from the unlicensed market may contain harmful substances, such as heavy metals and pesticides, which can lead to adverse health outcomes for consumers (Dryburgh et al., 2018; Eykelbosh, 2020). For instance, a 2021 study found a high prevalence of contaminants, including pesticides, bacteria, fungi, lead, and arsenic, in cannabis samples from the unlicensed market (Ministry of Public Safety and Solicitor General, 2021). Additionally, a report from the New York Medical Cannabis Industry Association found the presence of contaminants such as Escherichia coli, salmonella, and pesticides in cannabis products from the unlicensed market in New York, as well as misleading labels and youth-targeted branding (New York Medical Cannabis Industry Association, 2022). These findings underscore the importance of regulatory oversight to ensure product safety. As such, the Act aims to reduce cannabis consumption among youth, keep profits out of the pockets of criminals, and allow adults safe access to legal cannabis (D. of J. Government of Canada, 2021). The success of these goals relies on the ability of the federal, provincial, and territorial governments to effectively regulate the legal cannabis market and implement regulations that benefit all stakeholders involved in the production, distribution, sale, and possession of cannabis for non-medical purposes (D. of J. Government of Canada, 2021; Wesley & Murray, 2021). Under this legal framework, provinces and territories have the ability to set their own objectives, rules, and regulations, choosing a retail model that is state-run (characterized by government ownership, control, and operation), privately run (independently owned and managed), or hybrid (a mix of both state- and privately run models) (Table 1). Most provinces and territories (8 out of 13) have chosen models that involve some private retail, which makes up 85% of Canada's cannabis retailers and 65% of legal sales in 2019 (Government of Canada, 2019).

While the cannabis industry has faced numerous challenges, privately operated retailers’ challenges are primarily centered on the regulatory requirements for opening and operating a retail store and competition from the unlicensed market. Most, if not all, jurisdictions have experienced a shortfall in sales, which has been attributed to provincial and municipal regulations, unlicensed market competition, accessibility, and supply chain issues (B.C. Chamber of Commerce, 2020; CBC News, 2019; Financial Post, 2019). Some reports suggested that strict regulation was the main factor contributing to the challenges faced by private cannabis retailers (Brownell, 2019; CBC News, 2019; Deloitte, n.d.; Financial Post, 2019; MacDonald, 2019). These regulations included limitations on the number, type, and location of stores, set hours of operation, restrictions on marketing and promotional activities, and a cap on the amount of tetrahydrocannabinol (THC) permitted in certain cannabis product types (Health Canada, 2019; Ontario Public Health Association, 2021). Wesley and Murray (2021) described these regulations as a demarketing approach aiming to decrease legal sales demand and encourage responsible consumption. They suggested that this approach may temporarily improve public health, but in the long run, it may harm public safety and prevent government agencies from reaching their goals of eliminating the unlicensed market (Wesley & Murray, 2021). As the National Post reported, these “well-intentioned requirements are actually barriers to long-term success” (National Post, 2021a).

The Government of Canada's justification for tightly regulating the cannabis retail market was to reduce potential health risks for consumers (Canadian Centre on Substance Use & Addiction, 2020; Health Canada, 2016). High levels of THC can lead to adverse effects such as intoxication, anxiety, and psychosis (Canadian Centre on Substance Use & Addiction, 2020; Health Canada, 2018; Matheson & Le Foll, 2020). However, the desire for higher THC products, which were either unavailable or too costly from licensed stores, may have led some consumers away from the legal market, possibly undermining public health and safety (Kaplan, 2021). As highlighted by the Cannabis task force in 2016, excessive regulations might lead to the resurgence of the illegal market, while inadequate restrictions could pave the way for an uncontrolled and potentially harmful legal market (Health Canada, 2016). They argued that a competitive licensed market regarding price, product variety, consumer education, and safe and reasonable product access is necessary to displace the unlicensed market (Health Canada, 2016).

Access to safe cannabis products through a legally regulated market is critical for minimizing potential harm associated with cannabis use. To protect public health and eliminate the unlicensed market in Canada, it is crucial to find a balance between strict regulations and providing easy access to legal and regulated products (Myran et al., 2019). Publicly run cannabis stores can assist in this effort, but the high demand for cannabis products in Canada may exceed the capacity of publicly run stores to meet this demand. For example, a study examining social media tweets about the Ontario Cannabis Store found that Canadians expressed widespread dissatisfaction with the government-controlled retail model in Ontario. This discontent stemmed from delays in product delivery due to higher-than-expected demand, limited physical stores, and restrictive purchasing options, preventing consumers from accessing their preferred cannabis products (Aversa et al., 2021). Private operators may be an organizational and sector solution to mitigate the discontent. However, if private cannabis retailers are unsuccessful in addressing this overall discontent within the regulated industry, this could lead to a shortage of legal, regulated cannabis and a possible resurgence of the unlicensed market where the products are unregulated and could harm consumers (Docherty, 2019; Wellington-Dufferin-Guelph Public Health, 2018). Given these potential risks, understanding the barriers private retailers face when opening and operating a retail store within this new market is crucial. This understanding is important for safe consumption, minimizing potential health risks, and contributing to the overall success of a well-regulated cannabis market.

The limited scientific research on the cannabis retail market since legalization highlights the importance of other sources of information, such as media coverage. Abundant media coverage of various cannabis-related topics has significantly impacted public perception and policy decisions (CBC News, 2019; Financial Post, 2019; National Post, 2021a). This extensive media coverage can serve as a valuable tool for various stakeholders, including cannabis retailers by raising awareness of their concerns and bringing attention to the most important issues, potentially influencing government policy. Through a news media content analysis, we aim to identify the specific barriers private cannabis retailers faced in Canada. This study will contribute to the scholarly understanding of the regulated cannabis industry in Canada, media dynamics, and the challenges private retailers face. It may also provide insights for policy impact assessment and the development of successful business strategies.

The media has an essential role in society where it has the power to shape how the public and policymakers perceive the causes and solutions to public issues by selectively presenting and framing information, thereby setting an agenda for public discussions (Cook et al., 1983; Nimegeer et al., 2019). Soroka (2002) described an agenda as the ordering of issues based on their salience or importance, while Cook et al. (1983) depicted agenda setting as the “process by which problems become salient as political issues meriting the attention of the polity” (p. 17). First-level agenda-setting theory posits that the media creates salience by the number of news stories devoted to a specific topic, thereby creating an agenda effect (Anantram, 2020). The agenda-setting effects may differ due to the diverse nature of issues, but news media seems to exert a very strong agenda-setting effect as they are often viewed as a trusted source of information among the public (Soroka, 2002). Therefore, “news media are a key component of agenda-setting effect” (Luo et al., 2019), where media content can influence public discourse, playing a crucial role in getting public officials or policymakers to respond to public issues.

How the media covers political issues, such as the cannabis retail market, plays a crucial role in shaping how people understand and interact with the market. Evidence from media studies shows that media messages are not neutral but reflect the interests and preferences of government and other powerful actors in society, which can be influenced by conservative or liberal ideologies, impacting public support or opposition (Grossman, 2022; Savigny & Temple, 2010). According to Grossman (2022), the media plays a crucial role in shaping the strategies of political and collective actors, guiding politicians in monitoring news for reactions, assisting opposition forces in shaping political conflicts, and enabling powerful actors, particularly governments, to exert substantial influence through gatekeeping mechanisms. However, since news media often decides which issues receive more attention and which ones are less highlighted, it often leads to diverse interpretations, influencing shifts in public opinions and policy directions (Aversa et al., 2023; Cook et al., 1983; Nimegeer et al., 2019). For instance, the way cannabis is depicted in Canadian news has changed. It has shifted from traditionally negative representations to a more balanced perspective, highlighting aspects such as the specifics of legalization while diminishing the emphasis on crime (Aversa et al., 2023). This shift has led to a significant rise in societal acceptance and endorsement of more progressive attitudes toward cannabis (Aversa et al., 2023).

Similarly, a 2019 study suggested that the public's attitude toward cannabis shifted in a positive direction when the media predominantly framed it as a medical issue, gradually altering the perception of its harmfulness overtime (Felson et al., 2019). Additionally, the increased media framing of cannabis as a medicinal substance in Denmark has created a shift in its cannabis policy from its historical portrayal of cannabis as an illicit substance to the implementation of a medical cannabis pilot program in 2018 (Søgaard et al., 2021). This change, influenced by media coverage, citizen testimonials, and political proposals, highlights the significant influence of framing in altering both public perception and governmental priorities regarding cannabis use in Denmark (Søgaard et al., 2021). These studies illustrate that the way cannabis is presented and discussed can significantly impact policy decisions. While public and policymakers’ perspectives may not consistently drive policy changes, the likelihood of such changes increases significantly when journalists and government officials collaborate (Cook et al., 1983).

This collaboration underscores the multifaceted factors influencing cannabis policy decisions, highlighting the need for a framework that aims to balance public health and safety with the success of retail operations to effectively evaluate the cannabis retail market. To address this gap, we developed a framework called the comprehensive cannabis retail framework (CCRF), integrating concepts from the Canadian Public Health Association's public health approach to legalization, regulation, and restriction of access to cannabis and the environmental theory, a classification of the theories of retail institutional change (Brown, 1987; Canadian Public Health Association, 2017). The Canadian public health approach to cannabis focuses on regulating the cannabis retail market to ensure safe access to cannabis products through interventions that promote and protect health, reduce harm, and prevent adverse effects (Canadian Public Health Association, 2017). These interventions include a strict regulatory framework of how cannabis can be sold, where stores may be located, how stores must be operated, and who can sell cannabis (D. of J. Government of Canada, 2021). The general consensus was that cannabis-related risks could be reduced by implementing strict regulations and managing these risks through the health system (Canadian Centre on Substance Use & Addition, 2020; Crépault, 2018; Potter & Weinstock, 2019). However, a public health approach prioritizes public health and safety over retailers’ profitability and ignores the factors influencing retailers’ success and sustainability (Brown, 1987).

On the other hand, the environmental theory of retail institutional change emphasizes the role of the retail environment in shaping retail changes and suggests that retail institutions, including cannabis retail operations, must adapt to various environmental factors to succeed (Brown, 1987; Ekwochi, 2020). That is, the environment in which a business operates is crucial to its success, and to survive change and competition, it must evolve by adapting or adjusting to environmental change (Brown, 1987; Ekwochi, 2020; Kent & Omar, 2003). The environmental theory of retail institutional change primarily focuses on factors in the macro- and micro-environments, such as economic, political, legal, social, demographic, cultural, and technological factors, as well as influences from competitors, suppliers and customers, labor markets, and financial institutions (Brown, 1987; Kent & Omar, 2003).

The retail market's success depends on adapting to these factors, which may also affect the ability of cannabis retail operations to be successful and may prevent the government from achieving its objectives of protecting public health and safety and displacing the unlicensed market. However, a limitation of the retail environmental theory of retail institutional change is that it does not consider decision-makers as a factor (Brown, 1991; Roth & Klein, 1993). It does not consider “what decisions are made and why” (Roth & Klein, 1993). Relating to the cannabis retail market, decision-makers (e.g., policymakers and retailers) are essential since they determine how stores’ outcomes change in the environment (Roth & Klein, 1993).

Consequently, it is necessary to develop a comprehensive cross-discipline conceptual framework, including concepts from the public health approach to cannabis and the environmental theory of retail institutional change. This framework helps categorize the barriers private cannabis retailers faced and facilitate the study's data analysis. It may provide a more nuanced, adaptable, and practical approach to understanding and addressing the multifaceted challenges associated with cannabis retail market, enabling effective policy decisions (Figure 1). The public health variables in the CCRF represent the government's policies, specifically the retail market regulations and law enforcement that were implemented to protect public health and safety. These policies affect the retail market since they were designed to help achieve Canada's legalization goals. The retail environmental factors listed in the CCRF describe the macro- and micro-environment and represent the success factors for the cannabis retail market (Figure 1). The combined public health and environmental variables and constructs in the framework may also be used as themes.

For this study, we evaluated the effectiveness of the CCRF by using the combined constructs and variables as a priori themes for the coding and analysis of the data we collected. While the CCRF is designed specifically for this study, it could also prove helpful in future cannabis studies and for assessing the impact of different governments’ cannabis policies on businesses. The formulation of the conceptual framework resulted in the identification of nine main categories, along with multiple sub-categories that make up the constructs and variables of the study. The constructs include government rules and regulations, legal factors, economic factors, demographic factors, technological factors, competitors, supply chain, socio-cultural factors, and consumers. Figure 1 displays the CCRF used in the study.

In this study, we utilized the CCRF as a tool to comprehensively and systematically document the media-portrayed barriers to private cannabis retailers (both prospective and licensed) in Canada and determine how the salience of these barriers changed over time. The CCRF provided a structured approach to understanding the complex relationships between various factors influencing the cannabis retail market. To identify these issues, we performed a quantitative news media content analysis involving a systematic and structured process of identifying specific words, themes, and concepts within a given text. This enabled us to accurately describe, quantify, and analyze the relevant texts and make meaningful inferences about the messages contained within them (Columbia University Mailman School of Public Health, 2022). A summary of the methodology is presented in Figure 2.

We identified 9,371 articles, of which 307 relevant articles were included after removing duplicates and applying inclusion criteria (Figure 3).

Using the CCRF, we identified and described six significant themes from national and provincial news media sources from 2017 to 2022 and illustrated how the salience of these themes varied over time. Our study found that all six themes exhibited various degrees of salience at different times. However, barriers related to government rules and regulations, supply chain, and competitors were most prominent in the news articles we identified.

Quantitative content analysis collects and analyzes data, identifying trends, patterns, and relationships within a dataset. As a result, this method of analysis may be subject to interpretation bias as we may have missed essential contexts or nuances that cannot be easily quantified. One approach to mitigate this concern is combining it with other research methods, such as surveys, discourse analysis, and interviews, to provide a more comprehensive analysis (McCombs & Shaw, 1972; Metag, 2016; Xu, 2020). However, we are confident in the results of our study due to our thorough, systematic approach, which enhances the validity and reliability of the results.

The generalizability of this study is limited due to two sources of selection bias. First, only articles that mentioned at least one barrier in the title were included in full-text screening, which may have resulted in excluding articles discussing barriers not mentioned in the title. Second, the articles’ selection criteria resulted in an overrepresentation of results from certain provinces and underrepresentation in others. Future research should directly examine newspapers from distinct provinces and territories instead of solely depending on databases. Moreover, our study showed that most of our selected news sources have political predispositions that could have influenced the collected data. Although we have attempted to minimize this bias by incorporating news media sources from various political perspectives, we found that most media outlets were Conservative.

Another limitation of our study is related to our novel conceptual framework (CCRF). While our framework was instrumental in identifying and analyzing the barriers to private cannabis retailers, we were not able to test it empirically as not all themes were applicable to this study. The framework should be empirically tested in a more diverse context to enhance its robustness and applicability, thereby mitigating the current limitation and offering a more validated foundation for future research in this domain.

Concerning future research directions, this study is part 1 of a two-part study, which identified the barriers to private cannabis retailers that are discussed in the news. Part 2 of this study will explore the news media narratives to gain a better understanding of how news media framed these barriers. It aims to offer insights into private retailers’ experiences and potential policy implications.

Our research represents a rigorous analysis of the media-portrayed barriers private licensed and potential cannabis retailers face in Canada. To our knowledge, this study is the first to provide a descriptive analysis of the barriers to private cannabis retail operations in Canada through a news media content analysis. Utilizing our conceptual framework, we identified several salient barriers to private cannabis retailers, including those related to government regulations, supply chain, and competitors, and have underscored the importance of addressing these barriers to protect public health and safety and displace the unlicensed market. Our findings have significant implications for policymakers, offering insights into the cannabis retail market and serving as a valuable resource for future researchers. This study may also guide governments in effectively deregulating or decriminalizing other controlled substances while minimizing these barriers.

In light of these findings, policymakers may want to consider implementing stricter controls over the concentration of retail stores in oversaturated areas. This could involve imposing licensing moratoriums or passing additional legislation to ensure a more balanced distribution of retail stores (Maynard, 2021).

Furthermore, federal and provincial/territorial governments may consider revising some promotional restrictions to enable licensed retailers to provide accurate product information, educate consumers on safe cannabis use, and help consumers differentiate legal products from illegal ones (Ontario Cannabis Store, 2022). Such measures could aid in achieving harm reduction goals and fostering brand loyalty among consumers.

Additionally, small cannabis retailers across provinces may consider forming co-operatives to address supply and demand imbalances. This collaborative effort may improve competitiveness through pooled resources, improving product sourcing and pricing (Co-operatives First, 2022).

However, to have a more significant impact on the policy agenda, further research is required in this field, using qualitative research methods that are interpretive, evaluative, and designed to understand retailers’ perspectives. Specifically, a direct exploration of retailers’ experiences is needed, as is an examination of the factors that enable the cannabis retail market to set the agenda for policy change and refinement.

Finally, as we did not assess whether these barriers influence policy decisions, further research is needed to determine whether federal, provincial, and territorial governments respond to the varying levels of media attention on retailers’ barriers and their potential effect on the study population. Additionally, since cannabis producers play a significant role in the cannabis retail market and can affect private cannabis retailers directly and indirectly, future studies should be conducted to examine the barriers faced by cannabis producers to fully understand the cannabis retail market in Canada.

A special thank you to Sandy Brennan, Web Content Manager at the Memorial University of Newfoundland, for her valuable feedback on a draft of this paper.