Alberta’s proposed framework to regulate marijuana leaves open the possibility private companies could sell adult-use products, a move that would be a boon for businesses wanting to participate in the province’s retail sector.
The provincial government also signaled it is open to marijuana cafes and lounges, which would provide more opportunities for entrepreneurs.
But the regulations governing such venues – as well as those for online sales – probably won’t be ready by the time adult-use legalization is scheduled to take effect July 1.
Giving private businesses a crack at adult-use sales would set Alberta apart from Ontario, Quebec and New Brunswick.
All three provinces have unveiled plans to use government-owned corporations to operate the retail side of the rec business.
The government is still considering two options for retail:
- A government-run monopoly, which would involve significant upfront costs for taxpayers.
- Licensed private outlets, which would be separate from alcohol stores.
Aaron Salz – founder and CEO of Stoic Advisory, a cannabis consultancy firm in Toronto – said Alberta’s proposed model is the most inclusive put forward by a province so far.
“Doors are open to private retail and public consumption places, both major positives for small business and aspiring cannabis entrepreneurs,” he said. “There’s still work to do, of course, but it should give people comfort that business plans can start to be built and potentially even investments made ahead of next summer.”
Licensed producers based in Alberta welcomed the clarity the framework brings to the provincial industry.
“We hope the province takes the right innovative approach on distribution, retail and production,” said Stan Swiatek, CEO of Sundial Growers in Airdrie. “There’s economic potential here, not just on sales themselves, but from producers’ level for job creation.”
The Alberta Liquor Store Association, meanwhile, remains hopeful the government sticks with the private sector for retail.
Association president Ivonne Martinez wants the province’s 1,400 private liquor stores to have the opportunity to sell legal cannabis in a separate location.
“It’s saving the government taxpayers’ dollars, while delivering the same safe and responsible retailing you would see in every other province,” she said.
Ancillary opportunities
The framework leaves open the possibility there could be ancillary businesses opportunities serving home growers, because cultivation would be allowed indoors but not outside.
That could be good news for a company like Alberta-based Aurora Cannabis. It recently purchased two companies that specialize in self-contained indoor hydroponic grow systems as part of a strategy to tap Canada’s rapidly growing home-grow marijuana market.
“This will reduce the need for consumers in more remote and rural areas to purchase cannabis from the illicit market because they are not near a retail location,” Alberta’s Justice Ministry said in a report detailing the province’s plan.
Lounges
Cannabis cafes and lounges may not be part of the system on Day One, but the government will consider such establishments in the future.
If lounges are allowed, consumption would likely take the form of edibles and other infused products, because the province plans to restrict the consumption of leaf cannabis in public to spaces where tobacco smoking is also already allowed.
“Although many Albertans said they supported having cannabis cafes or lounges, Alberta will not initially have any venues specific to consuming cannabis,” the provincial government said in its report.
The city of Edmonton, meanwhile, is considering allowing the establishment of cannabis lounges.
According to the province’s legalization blueprint:
- Regulatory costs and taxes will be kept low enough to allow legal businesses to compete with the black market.
- Sales will be limited to a maximum of 30 grams per purchase.
- Adults will be allowed to grow up to four cannabis plants per household.
- The consumption of leaf cannabis in public would be limited to spaces where tobacco smoking is also allowed.
Matt Lamers can be reached at mattl@mjbizdaily.com
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