Cannabis was legalized nationally in Canada (in Phase 1) on October 17, 2018. In terms of cannabis sales, the initial six months of this new era was a disappointment, to customers, to cannabis firms, and to their shareholders.
It is now a matter of public record that the major explanation for the anemic pace of sales in these early months was the abysmal price at which most of Canada’s provinces have been opening up retail storefronts for legal cannabis sales.
This dilemma is now at least partly resolved. Canadian cannabis sales have been increasing at a double-digit price considering the fact that April. With the most current information from June, that indicates (at least) 3 consecutive months of this robust development.
It is also a matter of public record that one particular province has been top the way in legalization: Alberta. As opposed to all its peers, Alberta was prompt and effective in opening its personal cannabis shops.
Certainly, the one particular “problem” with retail cannabis sales in Alberta has been attempting to hold these shops supplied as Canadian LP’s ramp up their cultivation. This triggered the province to place a short-term moratorium on new cannabis shops.
That moratorium was ended in June. Due to the fact then, there has been a additional explosion of development in Alberta retail cannabis. Heather Holman of Alberta Gaming, Liquor and Cannabis (AGLC) gives the numbers, in an write-up from The Development Op.
“We have 277 retail cannabis places all through the province which I feel is a great indicator of improved production and getting in a position to give sufficient provide for retailers.”
That total of 277 retail places exceeds the quantity of outlets in Canada’s other provinces, combined. Ontario, regardless of hosting 40% of Canada’s population, has a mere 22 cannabis shops. Whilst the AGLC considers Alberta’s cannabis shortage “to be over”, retailers paint a slightly distinct image.
Ryan Roch of Lake City Cannabis (close to Calgary) presented these observations.
“We’re presently seeing shortage on very a handful of licensed producers (LPs) — there’s a lot of overstock of particular things, and quite small or no stocking of very a few…I would say anyplace close to 60 to 70 % of the stock that I want to attempt to bring in.”
Even with these 277 retail places, Alberta’s cannabis demand is increasing so quickly that shops have difficulty maintaining their shelves stocked. That sends two clear messages, one particular to other Canadian provinces and one particular for cannabis investors.
The message to these other provinces (specially Ontario and British Columbia) is uncomplicated: get your act collectively.
Alberta effectively launched hundreds of cannabis retail outlets inside the initial year of legalization. There is no explanation why other provinces couldn’t have matched at least half that total (assuming a enough customer population).
The message for investors is also uncomplicated. As a complete, Canadian cannabis retail sales are nevertheless just the tip of the iceberg in terms of the total customer dollars offered.
The Seed Investor has previously reported that 72% of recreational cannabis sales in Canada in 2019 is anticipated to go to the black market place, according to Scotiabank analysts. In a Vice write-up, the very same analysts predict that this could drop to 38% by 2020.
Alberta is displaying that such progress is very easily attainable. That translates to continued powerful development in Canadian cannabis retail sales and strengthening bottom-lines across the business.