In Canada, we’re several months into marijuana legalization and that means an ever-changing landscape. Although supply issues have been plaguing the industry, we’re still seeing pot shops make progress across the country. And with Ontario set to permit private retailers as of next month, we’re going to see a whole lot more pot shops. There are a few companies already trying to fight for market share in retail and in the coming months and years we could see a lot of changes happening.
National Access Cannabis Corp (CSE:META) is one of the bigger players when it comes to retail and earlier this week the Company provided an update on its operations. Since legalization back in October, National Access Cannabis Corp (NAC) has generated sales of more than $20 million through its retail network. Previously, The Company had said it had done a little over $10 million in the first 80 days, and now with 140 days gone by, that number has doubled.
More growth coming
Currently, NAC is the largest private retailer in the country for cannabis with 23 stores across Alberta and Manitoba. In Alberta, The Companys operates 14 stores under its NewLeaf Cannabis brand while it has nine stores in Manitoba under the Meta Cannabis Supply Co. banner.
However, NAC isn’t content with where it is and still plans to grow its operations.
We are just in the beginning days of an industry with explosive projected growth, and we continue to actively pursue opportunities to deliver shareholder value. With the LGCA and AGLC reporting improved inventory for spring 2019, more stores expected to come on line in Manitoba in the next quarter, positive movement with our applications in British Columbia, and a streamlined store design to better manage fixed costs and capex, we’re confident that our revenue momentum will continue for the foreseeable future
– Mark Goliger, CEO of National Access Cannabis Corp
NAC also has a strategic alliance in place with The Second Cup Ltd (TSX:SCU) that could prove dominant in the industry. With the popular coffee chain looking to convert many of its existing locations into pot shops, it could quickly penetrate the market. However, it may take a bit longer to see that happen, especially as Ontario has restricted its initial rollout to just 25 licenses out of concern for supply issues. Over the long term, this partnership could give NAC a big advantage over its peers as Second Cup has many prime locations that could help generate a lot of traffic and bring in a lot of sales.
Many challenges for retailers
Obtaining a license to open up a pot shop is highly coveted given how big the industry is expected to be, especially once edibles are legalized later this year. But there are some big hurdles as well, as not only will there be a lot of competition, but supply issues and a lack of advertising are just a few of the hurdles that retailers will face.
That’s why having access to key locations for NAC is going to be paramount in growing its brand. Without a lot of traffic, it will be a challenge for a store to bring in customers, especially down the road when there are many more retailers and more options for people to buy cannabis from. Retail is shaping up to be very competitive and any edge a company can get could prove to be significant.