Private cannabis stores are better for everyone

System has already a proven winner with alcohol sales, writes Janet Riopel.

As the legalization of cannabis unfolds, a key question has emerged: should cannabis be sold by the private sector or by government?

The Edmonton Chamber of Commerce recommends the province stay out of the retail business and build on the success of our privatized liquor model. Alberta’s entrepreneurs are ready, willing and able to take on the risks and rewards associated with developing this new industry.

Creating and maintaining a public retail system for the sale of cannabis would be expensive, complicated and risky. This, at a time when the province, with its growing debt load, can least afford it.

Alberta hasn’t been in the retail business since it privatized liquor stores in 1993. The government has said there won’t be online sales of cannabis in Alberta, so it would have to build hundreds of brick-and-mortar stores across the province to meet demand. Why would Alberta’s government enter the retail market when the competitive liquor system in Alberta operates so well and the private sector has a proven track record of success?

There would be no risk to taxpayer dollars with a private cannabis system, and the potential benefits are significant. A private system will create jobs and support economic diversification.

It will also give government additional revenue to help manage Alberta’s fiscal deficits and growing multibillion-dollar debt.

There will be some who argue the risk of a public system would be worthwhile because it would realize higher revenues for government. The numbers and data simply do not support that.

Using data from Statistics Canada, the Edmonton Chamber compared Alberta’s liquor system to Ontario’s, where the Liquor Control Board of Ontario (LCBO) operates more than 650 government-owned retail outlets. In Alberta, the Alberta Gaming and Liquor Commission (AGLC) acts as wholesaler, selling liquor to private retailers.

We found that in Alberta, the AGLC generated $2.26 in profit per litre of liquor; the LCBO generated $1.80 per litre. For each bottle of liquor sold, without a single government-owned retail store, Alberta realizes 26 per cent more revenue than Ontario does.

The AGLC is much more efficient than the LCBO. For every dollar spent by the LCBO, Ontario makes only $2.26, whereas for every dollar spent by AGLC, Alberta earns a return of $24.51.

We recognize profit is not the only issue that comes with legal cannabis. The Edmonton Chamber of Commerce has been advocating for a balanced approach between the risks and opportunities legalization presents.

The opportunities are unprecedented — a new, multibillion-dollar industry with plentiful business opportunities in numerous areas including retail, agriculture, testing, security and tourism. If legalization is undertaken thoughtfully, with a well-regulated private retail system, the economic benefits will be realized while limiting the risks to employers, workers and the public.

We urge the province to adopt a private system of retailing for cannabis. Private retail will benefit business, consumers and government. Let business do what it does best.

The Edmonton Chamber of Commerce recommends the province stay out of the retail business and build on the success of our privatized liquor model.