CanadaNewsRegulationsRetailCity of Calgary Approves 209th Cannabis Store, While Rest of Country Lags Behind

While Alberta leads the way with 284 pot shot licences being issued, other provinces lag being in brick-and-mortar infrastructure which is allowing the black market to thrive.
Jared Gnam Jared GnamSeptember 19, 201911 min

If you build it, they will come. That seems to be the motto for Calgary city officials when it comes to supporting cannabis retail infrastructure.

Canada’s fourth most populated city has approved 209 pot shops in the first 11 months of national legalization and there appears to be no end in sight, according to a recent Calgary Herald report.

For those who haven’t been following Canada’s nascent cannabis sector closely, the rollout of the legal weed market was mired with supply shortages — especially within the “final mile” of the supply chain (ie. getting dried cannabis in government approved packaging with excise stamps). This has led to a slow trickle of store licences being issued by provincial regulators and a relatively low number of stores operating today.

Marijuana titans Canopy Growth (TSX:WEED) and Aurora Cannabis (TSX:ACB) have both blamed the delays in retail store openings as one of the main causes for their recent weaker-than-expected quarterly results.

“Today, both Ontario and QuebecCanada’s two most populous provinces – have one store for every 595,000 and 495,000 people, respectively, versus a saturation rate in Colorado, for example, of 10,000,” noted Canopy in a press release.

Aurora reported its fourth quarter results last week, and not only did its $99 million revenues miss the company’s own guidance, but it posted an adjusted EBITDA loss of $11.7 million when it previously predicted it would turn a profit.

“If there were a broader retail infrastructure, and more stores available in Canada and open, that pretty likely would have made the difference toward us reaching that milestone,” Cam Battley, Aurora’s chief corporate officer, told the press.

Alberta leads Canada in cannabis sales, stores

But the sluggish retail rollout hasn’t been nearly the same issue in Calgary or the province of Alberta. The Wild Rose province has an all private retail market with store licences issued by the Alberta Gaming and Liquor Commission (AGLC).

To date, the AGLC has granted 284 retail licences throughout the province and the agency has received a total of 1,248 applications with 457 that are pending approval.

AGLC spokeswoman Chara Goodings said the process is based on the public demand for legal cannabis at the end of the day.

“That’s why it’s private, that’ll dictate if there’s a surplus of stores,” she said.

Although not all 284 licence holders have opened their store doors to the public yet, Alberta is by far the leader in cannabis brick-and-mortar infrastructure in Canada.

In fact, according to Statistics Canada data on retail figures, Alberta lead all provinces with $123.6 million in sales from the day pot was legalized on Oct. 17 to the end of June.

Of the 209 stores approved by the city of Calgary, the AGLC has approved 63 stores.

Westleaf (TSX-V:WL), which was named Canada’s top retailer at a major cannabis exposition last week, opened its first pot shop in Calgary last weekend.

“You know for the industry it’s very important that we increase the accessibility and distribution of cannabis,” Westleaf CEO, Scott Hurd, told Mugglehead earlier.

“The roll out of legalization of cannabis was fraught with many challenges, one of them being just accessibility and availability and just overall supply which actually throttled and regulated the roll out of retail locations across Canada.”

B.C. dragging its feet on store rollout: Vancouver pot shop owner

When Canada became the first industrialized nation to legalize pot, one of the federal government’s stated goals was to stamp out the black market.

According to Statistics Canada figures, however, 42 per cent of consumers reported sourcing at least some of their cannabis from illegal sources, including drug dealers. Also, 37 per cent of Canadians said they sourced their pot from friends or family, which is unclear whether that would be from from legal avenues or not.

The lack of accessibility to stores across the country, experts say, is a driving factor why the marijuana black market is still thriving.

A Vancouver-based cannabis retailer has called on the British Columbia government to speed up the store licence application process, as executives say long waits have are costing jobs and drying up the company’s cash flow.

Eggs Canna CFO Angie Mcnab said the company submitted two applications in Oct. 2018, but they’ve remain tangled in a “security check” phase for seven months.

“We just get redirected and then redirected back again. It’s very frustrating. And it is also extremely difficult to be able to answer questions to a shareholder,” she told Global News.

Cannabis retail licences are processed by Liquor and Cannabis Regulation Branch (LCRB) in B.C. and the province has a mixed model of pot distribution and sales which allows for both private and government-run retail cannabis stores.

Mcnab noted the province has to process over 400 applications, but argues the government stores are being fast tracked.

The LCRB has five stores in B.C. in operation today and has issued 98 private store licences, but not all of those licences mean the stores are actually open and most have been granted since May.

According to the B.C. government, municipalities in the province can intervene in the licensing process which can slow the proceedings down — something that is unique to only B.C. Currently, 305 applications have been referred to local governments or Indigenous nations for their approval.

In Ontario, the country’s most populated province, there are currently 24 legal marijuana stores open to the public. The province’s plan to have 75 stores open by the end of the year is currently being held up by an Ontario judge, who is investigating grievances held by disqualified licence applicants.

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