Shortages limit pot retailer’s initial sales to $4 million
Pot shortages held revenues for Canada’s largest cannabis retailer to about $4 million since recreational marijuana was legalized in October, said the company’s CEO.
National Access Cannabis’s (NAC) Mark Goliger said the black market marijuana trade is playing a useful role in filling the void left by the legal industry, whose shelves are often mostly bare.
“For as bad as the shortages have been, think of how much drier it would be if we’d gotten rid of all the illegal dispensaries,” Goliger said Thursday.
“It’s just keeping the boat afloat right now.”
He noted black market online cannabis sellers are still openly operating.
Although now might not be the best time to shut them down, enforcement will eventually have to happen, he added.
“You can’t continue to allow a legal consumer to purchase from illegal sites when there’s a legal market,” said Goliger, whose company operates NewLeaf cannabis stores in Alberta.
In the first 50 days of recreational legalization, NAC’s 18 stores in Alberta and Manitoba racked up $3.95 million in sales, a figure the CEO calls encouraging.
But he said without logistics issues that have put a crimp on supply, that number would have been greater.
“A hundred per cent certain they would have been better, some stores have had very limited inventory, some have run close to closing their doors,” he said.
“If we’d had the full basket of goods, we’d certainly be able to provide consumers with a full portfolio.”
He said preferred package sizes haven’t always been available, nor have some varieties of edible oils.
“It’s not much different from an alcohol store when you’re looking for a less-expensive whisky and all they’ve got is 12-year-old Scotch,” said Goliger.
NAC operates eight NewLeaf stores in Calgary, where Alberta Gaming, Liquor and Cannabis has granted operating licences to 20 shops.
It has six other NewLeaf stores open throughout the province, and four in Manitoba under the Meta Cannabis Supply Co. name.
“We anticipate continued improvements in operations both as existing stores mature and we continue to roll out additional locations,” said Goliger.
He said NAC’s retailers expected more of a market for less-potent products, in the six to seven per cent THC range.
But demand has leaned heavily toward THC flowers at 20 to 25 per cent levels.
“Most of the demand is for the highest THC possible, and we’ve adjusted our inventory based on that,” said Goliger.
Despite complaints by some customers that legal prices have been exorbitant, Goliger said they’ve compared well with their illicit counterparts.
“Right now, we’re priced very competitively ... a lot of product is around that $10-a-gram mark,” he said.
NAC hopes to operate 25 stores throughout Alberta but could be waiting for some time to reach that number.
Last month, the AGLC imposed a moratorium on the number of cannabis stores they’ll license, halting the number now sanctioned at 65 until the supply issues are resolved.
The biggest growth area for NAC and its competitors is expected to be Ontario, when brick-and-mortar retail is slated to begin April 1, 2019.
The company expects to eventually open 75 stores in Canada’s largest province.