Cannabis retailers got some good news when the Alberta Gaming Liquor Cannabis (AGLC) announced last Thursday it will be lifting the ban on new cannabis licenses. Due to supply issue concerns back in November, the AGLC had stopped issuing new licenses.
However, on its website the AGLC notes the supply of cannabis has improved and that it would again be accepting new applications. The Alberta agency did slowly start processing applications after it saw an increase in supply in January, but now it will be able to issue as many as five per week if current supply levels are sustained.
Lots of applications to process
There’s a big queue for the AGLC to work through with 473 pending applications and it will take some time for the backlog to be worked through. But the good news for the industry is more cannabis retailers will be able to set up in Alberta.
One company looking to capitalize is National Access Cannabis Corp. (TSX-V:META), which is expecting to open a new location on June 5 in Calgary with another 10 stores that have already been built waiting for license approval. In addition, the Ottawa-based cannabis retailer has applied for eight additional licenses where stores haven’t been built yet.
– Mark Goliger, CEO of National Access Cannabis
National Access Cannabis is the largest retailer of cannabis in the country with lots more expansion planned. Currently, it has 25 stores across three provinces – in Alberta, Saskatchewan and Manitoba. However, its aspirations are much higher and plans to open 40 more by the end of this year – and that could be met just as a result of expansion in Alberta alone. The Ottawa retailer is also applying for licenses in Ontario and British Columbia, and so it could come in well above that number in its near future.
By the end of next year, National Access Cannabis hopes to have as many as 110 stores operating across the country. It’s a lofty goal that would give the company a huge presence in Canada and a big market share of retail sales. It currently has been producing strong results so far. As of March, National Access Cannabis had generated $20 million in sales since legalization. In its most recent quarter, the company also saw its sales double from a year ago.
Great sign for the industry
The moratorium being lifted in Alberta is not only a boon to retailers like National Access Cannabis, but to the industry itself. Without more pot shops opening it would have been difficult for the industry to grow, especially with edibles being just months from becoming legal. In many cases the infrastructure is already in place, but to encourage companies to build stores there needs to be the expectation that licenses will be granted.
It’s also welcome news the supply levels are finally climbing and the delta is starting to shrink. With a stronger supply it’ll mean more stock for store shelves and more competition and potentially better pricing for consumers drawing them away from the black market.