Pot supply shortage hurting retailers
Local entrepreneurs unsure when they will open
The unlicensed drug dealers are doing well. But some of Alberta’s governmentapproved marijuana stores are struggling in the face of ongoing supply problems. Many have reduced their hours or their days of service, insiders say — and some have been forced to close their doors permanently.
Some of the retailers with a number of stores across Alberta are getting by despite product shortages. But locally based entrepreneurs without deep pockets are hurting.
And hundreds more Alberta entrepreneurs may be facing even more imminent disaster, observers say. They’re the people who’ve met all the licensing requirements, complied with local zoning rules, signed leases and equipped new stores. But they have no idea when the Alberta Gaming, Liquor and Cannabis Commission will allow them to open — and few businesses can survive with no income.
Alberta, with 75 privately owned stores licensed to operate, is considered Canada’s leader in retail distribution. Recently, responding to a gradually improving supply situation, Alberta regulators issued 10 new licences after freezing the number at 65 late last year amidst reports of nation-wide shortages.
But none of those 10 went to southern Alberta communities — like Pincher Creek or Taber — which still have no legal retailers. Officials say permits are issued on a first-come basis, and the 10 applicants were next in line when the freeze was imposed.
“It’s the only fair way to do it,” an official says, even though many allowed additional stores in the Calgary or Edmonton area. “People will be upset whatever we do.”
In Lethbridge and elsewhere, many would-be retailers who are still paying rent haven’t been told how soon they might take down their “Opening Soon” signs and actually welcome customers. But across the province, officials say more than 80 entrepreneurs have already abandoned hope and cancelled their applications.
But while newcomers to the industry wait for permission, insiders say long-operating suppliers selling outside the law are doing a brisk business. They’re not running out — and their prices are lower.
“The illegal market is winning,” says one Lethbridge observer.
AGLCC officials say within weeks of the Oct. 17 legalization date, they’d received hundreds of applications from business people eager to open their doors.
By mid-January, they were facing a mountain of more than 675 forms.
And they have really no idea how soon things will settle down.
“Some suppliers say it could be four to 16 months,” says Chara Goodings, a senior communications officer for the Crown corporation.
“We’ve been seeing a modest increase,” she reports.
But “We’ve been scouring the entire country,” and there are seemingly shortages everywhere.
Alberta officials have been contacting additional suppliers as they’ve come into production, she adds. But that hasn’t yet led to improved supplies.
Goodings says AGLCC management is well aware of the situation hundreds of applicants are facing.
“We really empathize with them,” but there’s little they can do until supplies improve.
Meanwhile, one Alberta start-up entrepreneur has turned his retail NewLeaf operations over to a major chain based in Ontario. Angus Taylor is the Calgary-based businessman who qualified for some of the very first licences, including Lethbridge’s first shop on Mayor Magrath Drive. It and two more in Lethbridge are now among dozens operated by the Nation Access Cannabis Corp. from Etobicoke.
High Tide, operating as Canna Cabana, remains an Alberta-based company after an investment of $10 million by Edmonton-based marijuana producer Aurora Cannabis. Its Canna Cabana store in the city’s Southgate shopping area is one of a projected 37 across Alberta — once the freeze is lifted.
SpiritLeaf, with Lethbridge’s only downtown store at the moment, is part of an Alberta-based group that’s aiming to open more than 100 locations across the nation. Darren Bondar, president and chief executive officer of Inner Spirit Holdings, says it’s operating with a mix of franchised and corporate stores.
As he sees it, the AGLCC is doing a good job in a difficult situation. “There are a lot of challenges out of the gate,” he points out.
Bondar expected shortages for three to six months, “but we’ll eventually catch up.”
The government agency has proven fair in the way it’s sharing what products it receives, he adds. There are hundreds of different stocking codes (SKUs) potentially available, and AGLCC shippers are working with retailers to provide a variety of products as best they can.
But that’s little consolation for some of Alberta’s small, independent operators.
When a customer knows what he wants — and can’t find it in one of the new stores — insiders say there’s no trouble finding it elsewhere.
“We’ve got the customers,” says one retailer, who doesn’t want to be named.
“They come in all the time. But the product still isn’t there.”
And there’s little hope of finding what they want in another Lethbridge store. “We’re all in the same boat.”