A cannabis store in every strip mall might be too much for Alberta

·3 min read
Alex Macyszyn, who works at a northwest Calgary cannabis shop, says the number of cannabis stores in the city makes for stiff competition. (Paula Duhatschek/CBC - image credit)
Alex Macyszyn, who works at a northwest Calgary cannabis shop, says the number of cannabis stores in the city makes for stiff competition. (Paula Duhatschek/CBC - image credit)

From behind the counter of a northwest Calgary cannabis shop, Alex Macyszyn serves a handful of midday customers.

He has plenty of company in his line of work: there are at least three other cannabis stores within a five-minute drive, and another one that recently closed down.

"There's way too many cannabis stores just in this area," said Macyszyn.

"It makes the competition really hard."

A new analysis of the Canadian cannabis retail landscape suggests Alberta may have more cannabis stores than the market can sustain.

The report, from the Connecticut-based data firm Cannabis Benchmarks, notes that Alberta has the country's highest number of cannabis stores per capita. It also has more stores than what the firm considers an "optimal" number, based on benchmarks from more mature U.S. markets like Oregon and Colorado.

"We expect the number of stores in Alberta to decline over the next 24 months, as competition intensifies and store economics become less favourable," the firm's analysis says.

Brock University
Brock University

Retail landscape headed for shakeup

Industry expert Michael Armstrong agrees change is coming in Alberta. Already, he said, some cannabis stores are consolidating, and in the months ahead he believes others may try and get an edge in another location.

"Somebody who maybe said, 'Oh, I want to be downtown' … now might be saying, 'Well, gee, my rent's too high,''' said Armstrong, an associate professor of retail operations research at Brock University.

"Let me find a lower rent retail district, maybe a little more suburban, maybe off the main street, and then my business will become viable again."

Mags Bliss, who was shopping for cannabis Wednesday afternoon, agrees location is key to a retailer's success. While there are other cannabis stores in her end of the city, she said there's just one within walking distance of where she lives in the northwest.

"This one will do well," said Bliss. "But then when you go up towards Kensington … I find probably a lot of them won't make it in the long run."

Paula Duhatschek/CBC
Paula Duhatschek/CBC

'I'll be watching Alberta'

Until now, Armstrong said, the number of store closures has been outpaced by the number of store openings. He believes that trend will soon start to reverse.

But while it's clear Alberta has a relatively high number of cannabis stores compared with other parts of Canada, Armstrong said it remains to be seen what, exactly, a balanced ratio will look like.

He noted Alberta could become a good test case for other provinces, which adopted similar licensing systems later in the legalization game.

"I would say I'm definitely watching Alberta," he said.

Paula Duhatschek/CBC
Paula Duhatschek/CBC

Alberta Gaming Liquor and Cannabis (AGLC), which issues licences to cannabis retailers, told CBC News it couldn't comment on the Cannabis Benchmarks report.

In a statement, the commission noted there is no cap on the number of retail stores allowed in Alberta, and that licences are issued based on whether a retailer meets certain application requirements. Cannabis stores are also subject to certain restrictions on locations and local bylaws, the statement said.

"In the three years since non-medical cannabis became legal in Canada, AGLC has focused on the responsible growth of the cannabis industry," the commission said.

"By providing readily available options for Albertans to buy legal, high quality, competitively priced non-medical cannabis, AGLC is working towards eliminating the illicit market in the province."

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