In early 2024, attendees at adults-only festivals and trade shows in Alberta will be able to purchase cannabis goods from licensed retailers temporarily set up at the events.
The Government of Alberta announced the new regulatory measure Monday. It will come into force on Jan. 31 next year. The province says the move is aimed at combatting the illicit market.
“I am thrilled with these common-sense changes,” Raj Grover, Founder and CEO of High Tide Inc. (TSX-V: HITI) (NASDAQ: HITI), said.
Retailers will also be permitted to leave merchandise in locked display cases once their store is closed. Previously, they were required to move their assortment of cannabis goods into a storage room every night at the end of the shift.
“The improvements enable more effective inventory management, increased promotional opportunities and continued migration from the illicit market to better support the entire retail network,” Marcie Kiziak, CEO of Nova Cannabis Inc. (TSX: NOVC), said.
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Move received praise from many industry figures
Some hope that other Canadian provinces will follow in Alberta’s footsteps.
“We applaud the Government of Alberta’s decision to remove unnecessary red tape from the cannabis industry and we encourage other provinces like Ontario to follow suit,” Sam Vanderveer from Edmonton’s OEG Retail Cannabis said in a statement to CTV.
“We believe these improvements will foster a more competitive legal cannabis market, ultimately discouraging the illicit market,” Beena Goldberg, CEO of Organigram Holdings Inc. (TSX: OGI) (NASDAQ: OGI), told CTV.
Statistics Canada recently reported a 48 per cent increase in legal cannabis purchases since the end of 2018. However, the illicit market is one of the primary reasons that 83 per cent of licensed producers in Canada reported negative net income in 2022.
Financial struggles in the industry prompted Atlas Global Brands Inc. (CSE: ATL) to lay off 50 workers in June from its cannabis facility in Gunn, north of Edmonton. SNDL Inc. (NASDAQ: SNDL) also cut 85 jobs from its facility in Olds in early 2023.
Alberta residents currently are permitted to purchase and carry up to 30 grams of dried cannabis.
The province’s Ministry of Agriculture and Irrigation said in October that cannabis-related agricultural businesses in Alberta were eligible to obtain government funding if they met a series of requirements.
The THC limit on edibles is a major driver of illegal cannabis sales. The Cannabis Council of Canada (C3) says eliminating that restriction would reduce the amount of cash going into the hands of unlicensed suppliers by $300 million annually.
rowan@mugglehead.com
