Lydia: "We need to go to Canaan."
Malia: "It would be helpful if we knew anything about it. I keep calling the number for City Hall, and no one answers. The only map I can find on it is thirty years old. The only thing I know about Canaan is where it is."
Lydia: "That's all we need to know."
Lydia Martin and Malia Tate about Canaan in Ghosted

Canaan is a town in California a short distance away from Beacon Hills. In 1986, the town was subjected to the arrival of the Ghost Riders of the Wild Hunt, who went on to capture and erase all of the town's citizens from reality. The only exception was Lenore, a Banshee who was spared by the Ghost Riders, possibly out of reverence for Banshees due to their connection to the Irish battle goddess the Morrígan. The force of Lenore's grieving scream unlocked her full power over the entire town, causing her to have an inordinate amount of control over everything within its borders; she could induce hallucinations on anyone who entered, and could telekinetically move anything in her house. The force of this power even allowed her to project a phantom version of her son, Caleb, who had died several years earlier by drowning.

In Ghosted, ScottLydia and Malia went to Canaan after receiving a radio call from Stiles in the Phantom Train Station urging them to go there. Upon their arrival, they found that Canaan was a ghost town that hadn't changed since the Ghost Riders captured everyone in the 1980s. Lenore's control over the town caused both Scott and Malia to hallucinate the deaths of their family members, though Lydia, as a fellow Banshee, was immune from the power.

They then came upon Lenore's home, where Lenore became very upset when they urged her to give them information on the Ghost Riders. She used her powers to incapacitate Scott and Malia and tried to use her scream against Lydia, only for Lydia's scream to overpower hers. Lenore then allowed Scott, Malia and Lydia to leave, but not before warning Lydia that she would be spared by the Ghost Riders, too. When the trio urged Lenore to leave Canaan, but Lenore declined their offer, stating that he could leave the phantom version of her son, Caleb.