As many American smoke shops and headshops suffered seeing their competitors settling for cheap, low grade, knock-off import Chinese glass and gear throughout 2015, their counterparts to the north in Canada have been struggling mightily with an importing problem of their own.

Social media knows no borders and increased marketing from our industry has the Canadian retail customer base clamoring for the latest and greatest items that they see splashing across their smartphone screens.

This increase in consumer demand should be a good thing for Canadian stores, right? As we know, however, demand requires supply, and these days it’s especially hard for Canadian retailers to maintain a steady supply of American made/imported goods.

As of the writing of this article, the Canadian dollar sits at .72 compared to the U.S. dollar. In other words, if you were to send your friend in Canada a $1 U.S. bill, it would be worth $1.28 Canadian at today’s exchange rate.

This year saw an 11-year low in the value of the Canadian dollar, and unfortunately, many experts predict that it will continue to slide even lower throughout 2016.

The reason for the drop in value is primarily due to the fact that Canada’s commodity based currency relies so heavily on steadily steep oil prices. Global oil prices have remained reasonably low for quite some time, and major players like China have cut back severely on their imports of the resource. As a result, Canada has seen their economy sputter.
The weakened Canadian economy impacts all levels of our industry.

American artists, manufacturers, and distributors who spent years forming mutually beneficial relationships with their Canadian clientele saw typical big spenders fall off the radar completely over the past several months.

From a Canadian headshop owner’s perspective, once the fickle exchange rate between the American and Canadian dollar gets factored in with shipping costs, final retail prices become too outrageous in many cases.

Speaking recently to my friend Mike at Shell Shock in Edmonton, I realized that I had not heard from him for most of the year. Sure enough, the lackluster currency exchange had kept him away since the spring.

But as in most situations, there is a balance, and so there are opportunities to take advantage of these markets from a business perspective.

For one thing, homegrown Canadian start-ups have a much better chance of acquiring loans from local Canadian banks these days as the Canadian Federal Reserve has made it increasingly expensive for banks to hold assets. Also, Canadian companies should get much more support from their own countrymen, who can save a lot of money by not relying on imported goods.

When trying to sell to a Canadian headshop or smoke shop, for example, Canadian glass artists have a 28 cent head start on every dollar compared to an American artist.
Also, American collectors and retail customers can potentially find some big savings when shopping online with Canadian companies.

With more and more headshops creating their own e-commerce websites, and promising worldwide shipping, savvy buyers can save themselves that 28 cents on every dollar, and the store still makes its sticker price.

For example, Shell Shock has a Shackman Owl Bubbler for sale on their site (www.ShellShock420.com) right now for $1,379.99 Canadian. To a buyer in the U.S., that equates to just $993.59 American.

But those are not adequate solutions as an American manufacturer, artist, or distributor. So what can they do to counter Canada’s struggling dollar?

Ideally, U.S. businesses will find ways to save their Canadian customers money on things like shipping costs, or tiered price breaks on bulk orders, etc. Additionally, they can look to discount older inventory for Canadian customers for items that may have been sitting for a while, but could still be the hot new thing in Canada.

With smoke shop, vape shop, and counter-culture markets opening up and expanding from Spain to England and the rest of Europe, as well as in Australia and South America, the entire globe truly is becoming a viable marketplace for your goods and services.

Understanding how to read and predict these different economies, and the many cultural variables involved, will show those international customers that you are tuned in to the realities that they face as businesspeople. It is those connections with your customers that can take your company to the next level.

Whether you are a Canadian buyer, or an American seller, the bottom line is this: when currency exchange rates make traditional commerce more difficult, don’t get mad…instead find alternative ways to get even. SVBS

James Deighan Headshot PhotoJack “Guru” Riordan is a freelance writer and works in the smoke and vape industry. Jack brings well over a decade of high level sales and marketing experience to the table. Jack can be reached  by phone at 949.420.0507