I wonder if this is largely a function of geography and population. Do we see similar strange things in countries like Australia, Sweden, etc.? Kind of like a small town effect at the national scale.

Sweden has a fair amount of it - see https://en.wikipedia.org/wiki/Systembolaget and (formerly) https://en.wikipedia.org/wiki/Apoteket as examples.

I think it goes back all the way to the founding days of Canada, essentially the Hudson Bay Company.