POT SHOP APPROVALS STALLED
AGLC wrestles with supply crunch
The province’s need for weed has prompted Alberta Gaming, Liquor and Cannabis to deny new applications and withhold retail licences for pot shops amid an ongoing national cannabis crunch.
On Wednesday, the provincial agency responsible for overseeing Alberta’s fledgling legal cannabis industry said ongoing supply shortages have prompted the temporary halt to approving more retailers until supply lines are stabilized.
Alain Maisonneuve, president and CEO of AGLC, said a nationwide shortage of recreational marijuana has affected Alberta stores that they had hoped would have enough supply to last for months.
“AGLC ordered enough product to support up to 250 retail stores in the first six months of legalization; however, as of November 17 we have only received approximately 20 per cent of what we had ordered,” he said in a statement.
“While some licensed producers have fulfilled their commitments, not all have. We continue to work with them to fill stock. Unfortunately, regardless of our efforts, we are seeing the supply of most products run out.”
AGLC said it had taken steps to secure more product as looming shortages became apparent, contacting all producers with federal licences to sell cannabis, but were unsuccessful.
Given the shortage, AGLC announced it will temporarily halt accepting new applications as well as freezing additional cannabis retail licences indefinitely. Applicants will be entitled to a full refund of any fees should they wish to withdraw from the process.
AGLC spokeswoman Heather Holmen said until supply is stabilized, the focus will be on Alberta’s 65 currently licensed retailers, which will split weekly shipments evenly, with a smaller share kept for the agency’s online customers, many of whom live in communities not served by cannabis shops.
“It’s essentially being rationed,” she said, adding the province has contracted with 15 licensed producers whose output has fallen well short of what had initially been pledged.
“We’re not hoarding for ourselves. Weekly product will be split 65 ways equally, and retailers will have the option to purchase up to that limit.”
The bombshell came just as NewLeaf Cannabis, which operates the most licensed shops in Alberta, this week opened eight stores, including four in Calgary.
NewLeaf CAO Angus Taylor said the situation is devastating to those who followed the rules and invested significant money and resources into their businesses on the belief there would be ample supply of the drug, which was legalized by the federal government Oct. 17.
“This is going to impact every cannabis retailer. We have 14 licensed stores but our plan was to open 25, and now we don’t know when any of those licences will be issued,” he said, noting he expects there will be enough supply for the new stores that launched, but as product is sold it’s unclear what they’ll be able to keep on the shelves.
“We’re definitely concerned. We’ve hired people, we’re paying rent, we’ve done renovations — I think there’s going to be a lot of single-store operators devastated by this.”
As of Wednesday, some 65 recreational cannabis retailers had been granted licences by AGLC, including 20 in Calgary. A quick review of AGLC’s own online cannabis shop found just 19 of 146 listed products currently in stock.
According to numbers provided by the city, there are currently 104 applications that have met all of the city’s criteria and only need to obtain a licence from AGLC along with a business permit.
Brandy MacInnis, senior planning and policy strategist, said the city is trying to determine its next steps.
“The City ’s cannabis legalization team is currently looking into what this means to those customers currently in the approvals or appeal process,” she said in a statement.
“The City will be contacting cannabis retail customers over the next few days with additional information and options for their consideration.”
Cam Battley, chief corporate officer of Alberta-based Aurora Cannabis Inc., said given the still nascent nature of the industry, coupled with overwhelming demand, supply shortages shouldn’t come as a major surprise.
But he expects the bottleneck currently facing the industry won’t be long-term.
“Alberta is not alone in dealing with these concerns. We’re hearing every province and territory saying a version of the same thing,” Battley said.
“This was to be anticipated when we’re rolling out a very new and complex system. Everybody needs to step back and take a breath — expecting perfection on Day 1 of such a complex new industry would be a little bit unreasonable.”
Jeff Mooij, president of Four20 Premium Market, said its most recent cannabis shipment from AGLC included a poster to hang on the door, informing customers that they were out of stock, a troubling sign the shortages may be more than a minor hiccup.
We have 14 licensed stores but our plan was to open 25, and now we don’t knowwhenany of those licences will be issued.
“I don’t know what to expect. Every week’s different, we’re not sure what level of inventory we’re getting and neither does AGLC at this point in time because … they ’re not getting what’s been promised, not even close,” he said.
“It’s a further hole we’re digging for ourselves and it’s a scary environment to be in.”
Outlets licensed by the AGLC to sell recreational cannabis in Calgary (not all locations may be open for business):