COULD’VE BEEN HIGHER!

Canada’s top pot re­tailer says rev­enues con­strained by sup­ply

Calgary Sun - - NEWS - BILL KAUF­MANN bkauf­[email protected]­media.com @Bil­lKauf­man­njrn

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’ (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.

POST­MEDIA FILE

NewLeaf CAO An­gus Tay­lor shows off its re­tail lo­ca­tion at 1935 37th S.W. ahead of its open­ing. The com­pany said Thurs­day it made $4 mil­lion since le­gal­iza­tion.

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