Saskatoon smoke shop owner watches his dream business 'crumble and fall'

Smoke shop owner closing down WATCH: Jeffery Lundstrom has owned Skunk Funk Smoker’s Emporium in Saskatoon since 2008. Here’s why his business is failing.

Jeffery Lundstrom has owned Skunk Funk Smoker’s Emporium in Saskatoon since 2008, selling smoking paraphernalia like pipes, bongs, and papers.

Lundstrom says at one point business was booming, reaching $30,000 a month in sales — but business has dried up to the point where he can’t afford to stay open.

“We're looking at closing the doors in May,” he said. “I just let my employee go because I no longer can afford to have him here, so I'm back to work full time, six days a week.

“At this point just keep trying to keep the doors open, honour my lease until it's up in May. We're hoping to have a big 4/20 party, go out with style.”

Lundstrom says when he opened there were only three stores like his, and now there’s an oversaturation of cannabis and smoking apparel stores in the city.

“You can go to the dollar store, any corner store and buy a bong, so our shops have become a little bit more unnecessary.”

Saskatoon Chamber of Commerce CEO Jason Aebig says as of December, there were 30 retail cannabis stores spread across the city, with nine more pending approval to open. And 30 per cent of all cannabis retail stores in the province are in Saskatoon, he said.

“When legal recreational cannabis was introduced, the concept was that the free market itself would sort out supply and demand. There were initially restrictions on the number of retail outlets that could operate in Saskatoon and that's since been lifted.

“The City of Saskatoon just recently reduced the cost of new licenses for cannabis retail stores from $4,500 to $500. So right now there are fewer barriers than ever to enter this market.”

University of Regina associate professor of economics Jason Childs says he doesn’t see the market in Saskatoon as being oversaturated now, but it might be getting to that point soon.

“Is it oversaturation, or is it just the world has changed around the business? That's always really hard to say. Consumers want what they want, and if you're not providing it, the business is going to fail.

“This happens all the time with any business, particularly a retail or public-facing business. The market changes, preferences shift, and because people are now able to get both in one place, whereas if he was just selling paraphernalia that wasn't the case, then why would I buy from him and make an extra stop when I can buy the same product and my cannabis in the same store?”

That doesn’t take any of the sting out of deciding to shut down a business for Lundstrom.

“Heavily disappointed. I mean, I spent the last 14 years doing this and it's been my dream. So who wouldn't be disappointed to watch their dream crumble and fall,” he said, adding that he doesn’t see business picking up.