Calgary pot shops waiting for approvals concerned over disadvantages

Calgary pot shops waiting for approvals concerned over \disadvantages\
Alberta could support 500 cannabis stores, says industry consultant, AGLC
Marijuana legalization is days away, but Calgarians with high expectations around retail options might need to chill out.

Alberta Liquor, Gaming and Cannabis has given permission to 17 pot shops in the province to open their doors on Oct. 17; Calgary has two.

“There are still some additional requirements that these stores must fulfill before they will obtain their full licence for the retail of cannabis,” AGLC cannabis inspections senior manager Tom Siewert said. “So we’re working with each one of those interim licensees.”

In Calgary, pot shop locations and business licences are awarded by the city, but the final approval to sell as well as the physical marijuana product comes from the province.

“We wanted to be open the 17, that was the goal,” Canna Cabana co-owner Lucas Klapper said. “Its a historic day for Canada and we wanted to be a part of that.”

Canna Cabana has approval from the city to open a store on 10 Street N.W., and the team was full steam ahead to be ready for an Oct. 17 opening, however, construction slowed and the inside of the shop is unfinished.

“A couple weeks ago… we were told that things are not lining up and a lot has to be done still in terms of inspections,” Klapper, said. “There’s a due diligence process [with] the AGLC that we still have to get done.”

The AGLC said timing is behind the lack of provincially approved stores in Calgary. In comparison, Edmonton has six and Medicine Hat has three stores that will be selling on legalization day.

“A lot of it is up to the applicant themselves, and how quickly they construct and if what they have constructed for their premises meets our requirements,” Siewart said.

Those requirements include a due diligence review, physical inspections throughout construction and renovation as well as a final inspection when everything is finished.

Canna Cabana has more time to finish renovations and construction without rushing the Oct. 17 deadline, but the owners worry that may cost them.

“The disadvantage, obviously, is losing money, revenue, potential customers, potential revenue,” Klapper said. “We wanted to be open, we did, but it is what it is.”

“I believe the market is large enough that stores in different areas will have the same opportunity as the stores that are ready for the 17,” Siewart said.

The AGLC says inspections are ongoing and officials are working to get approved stores up and running as soon as possible. The AGLC has 64 inspectors visiting shops across the province.

As for Canna Cabana, they’re hoping they’ll be able to open their doors in late-October or early-November.

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 stales,” 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.

“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.

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 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.

Edibles arent expected to be legalized until next summer, but are readily available on black market websites.

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 green-lighted to open by month’s end, with some of those in Calgary, said the AGLC.