Province-operated pot stores too expensive, Alberta Party contends
The Alberta Party says a network of publicly owned cannabis stores will cost at least $168 million, a price it says is too steep to pay when the private sector is lined up to serve the market when recreational marijuana is legalized next year.
The NDP government has mandated that legal weed be sold in stand-alone stores but has not yet decided whether to set up government-owned and operated stores or allow private retailers.
In a news release Monday, Alberta Party Leader Greg Clark pegged the cost of a public system at $168.4 million.
That figure is based on an estimate of 372 stores in the province, matching the number of stores per capita in Colorado, where marijuana has been legal since 2014.
Based on estimations of demand for legal pot, the Alberta Party figures each store would have upfront capital and inventory costs of $452,805.
In an interview, Clark said he’s being “very conservative” in his estimates but the price is too high considering private liquor stores have shown their value in Alberta.
“The idea the government would establish a new bureaucracy to do something the private sector is already doing well is ridiculous,” he said.
“To even consider creating government stores, it makes no sense. It makes no financial sense, it doesn’t help keep product out of the hands of teenagers and I think most importantly, it undercuts Alberta entrepreneurs.
“Cannabis legalization is a massive economic opportunity for Alberta,” he added.
Government consultations are to run until Oct. 27, with the province expected to make a decision on public versus private stores during the fall sitting of the legislature, which starts next week and runs into December.
The Notley government said a private retail system for cannabis likely would be more flexible in meeting consumer demand and would provide more economic opportunities for small business.
On the other hand, the province said government-owned stores would provide a greater level of oversight of marijuana being bought and sold and would likely generate more government revenue in the long run. A public system would require significant upfront costs for the cash-strapped government, however, potentially putting taxpayer dollars at risk.
On the weekend, the Alberta Union of Provincial Employees passed a resolution backing government-run stores.
Justice Minister Kathleen Ganley, who is in charge of the cannabis file for the NDP, was not available for an interview and her office would not comment on Clark’s cost calculations.
“We are still awaiting information from the federal government about taxation and costs, and it would be premature to release any kind of cost estimates,” said a statement from Ganley’s press secretary, Veronica Jubinville.
The federal government has set July 1, 2018, as the date for legalization but has left many of the regulatory and administrative details to the provinces.