Alberta may soon host 500 pot shops

Expert says abundance of stores ‘key to destroying black market’

Alberta’s marijuana market could fuel 500 cannabis stores within a few years, says an industry expert and provincial regulator.

Considering Alberta’s population is only about one million below that of Colorado, which enacted legalized cannabis nearly five years ago and now hosts about 550 stores, the province should be able to support 500 of the outlets, said Dan Rowland, who advised the city of Denver on its retail rollout.

If anything, maximizing the number of outlets will ultimately ensure the industry’s success against illicit sellers, he said.

“That sounds like a lot of stores but access is the key to destroying the black market,” said Rowland, who’s now a consultant for Calgary-based retailer Four20 Premium Market.

“One of the first goals is to absorb that black market, and that only happens by opening up a bunch of stores.”

Both markets share a number of similarities, including a dynamic population that’s geared to outdoor pursuits, a Rocky Mountain geography and shared economic traits, said Rowland.

“It’s a pretty fair comparison — there’s plenty of room for a large number of retailers in Alberta,” he said, adding it’s not unrealistic that 500 number could be reached in three or four years.

In its first year of legalization, Colorado counted 322 marijuana outlets, and 459 after three years.

“Recreational cannabis sales have gone up every year, as have our per-store sales,” said Rowland.

The province hasn’t placed a cap on the number of cannabis stores. The Alberta Gaming, Liquor and Cannabis Commission has so far received nearly 800 retail applications.

While some of those filings have been rejected by municipalities or appealed, 500 stores in Alberta could come to pass, said AGLC spokeswoman Kaleigh Miller.

“(Rowland) could be bang-on with it, in a couple of years,” she said.

“I wouldn’t say he’s correct or incorrect but it’s a great speculation ... he’s probably pretty close to the number.”

The province has based its forecast of a possible 250 cannabis stores after the first year of legalization on the experience of Oregon, which has a population close to Alberta’s 4.5 million people.

But Miller said tight profit margins for the stores could fairly quickly weed out some of the players.

An AGLC information sheet cautions retailers it could be two years before they realize profits.

“It takes a few years to take off,” she said.

Some would-be cannabis retailers say wholesale cannabis prices set by the AGLC are too high for them to sustain a healthy business while competing with both the commission’s pot sales website and the black market.

There are currently about 1,500 liquor stores operating in Alberta, a number that’s grown from an initial 208 when that industry was privatized in 1993.

But while nearly 80 per cent of Albertans consume alcohol, Statistics Canada figures from earlier this year state that 17 per cent of the population aged 15 and over use some amount of marijuana.

But many in the cannabis industry are counting on a wider variety of cannabis products, including infused beverages and edibles, to vastly expand their market penetration.

Edibles aren’t expected to be legalized until next summer, but are readily available on black market websites.

“We’ve only scratched the surface,” said Rowland.

The AGLC says 17 cannabis stores will probably open when recreational pot legalization takes effect Oct. 17, with just two of them in Calgary, while 12 will be in the Edmonton area.

Up to 100 stores could be greenlighted to open by month’s end, with some of those in Calgary, said the AGLC.