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British Columbia had the lowest sales of legal cannabis of any province on a per-capita basis in July, nine months after legalization, as its sluggish rollout of retail stores failed to deflate the province’s long-standing black market.

Right next door, Alberta, which has hundreds of retail stores, sold more than four times the dollar value of legal cannabis per person.

B.C. recorded $5.5-million of legal cannabis sales in July, its strongest month to date, according to the latest Statistics Canada figures. It lagged smaller provinces such as Nova Scotia, and found itself well behind Ontario’s pace-setting $29.6-million in sales.

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Put another way, B.C. sold $1.09 of legal cannabis for every resident, compared with $9.55 in Prince Edward Island and $5.91 in Nova Scotia. The weak sales suggest B.C. will face a longer road than most in eradicating the black market.

“I think [B.C. has] a worse version of the same problem every other province has, which is that existing cannabis users, if they have an illegal dealer that they like … consumer inertia would be to stick with that dealer,” says Michael Armstrong, a business professor at Brock University in St. Catharines, Ont., who studies the industry.

The reason it’s worse, Prof. Armstrong says, is because B.C. has an especially developed black market that’s been built up over decades. Indeed, the province’s cannabis roots date back to the 1960s, when American draft dodgers arrived in the province with seeds. In time, B.C. evolved into a marijuana centre and the country’s largest producer.

Moreover, before recreational cannabis was legalized last October, hundreds of “grey market” dispensaries operated across the province. Since legalization, authorities have cracked down on these establishments, though some dispensaries have converted into legal enterprises.

A tepid rollout of retail stores has also weighed on legal sales. Though B.C. offered digital orders on Day One of legalization, it had only one government-run store in Kamloops. (B.C. is the only province that has taken a mixed public- and private-sector approach to retailing.)

Since then, store openings have been slow to ramp up. Six government-run stores have opened thus far, with another 10 on the way, according to the BC Cannabis Stores’ website. The private sector hints at much stronger store supply: 109 private retail licences have been issued, though not all locations are open.

“Supply shortages and slower than anticipated provincial and municipal approvals resulted in the B.C. cannabis industry evolving at a slower than expected rate,” said the BC Liquor Distribution Branch, which handles public-sector retail sales of non-medical cannabis, in its annual report.

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By comparison, Alberta has allowed a surge of retail stores. Thus far, there are nearly 290 locations either open or authorized to sell legal cannabis, and retail sales are handled exclusively by the private sector. Alberta has easily the highest number of stores among Canadian provinces.

The impact is evident in sales figures. Through July, Alberta has sold roughly $145-million of legal cannabis, compared with $25-million in B.C.

Store supply issues are not exclusive to B.C. “To date, the largest provinces in Canada have issued a small number of cannabis retail licenses relative to their estimated potential,” AltaCorp Capital said in a recent research note, pointing to such markets as Ontario and Quebec.

Pricing is another sizable hurdle. Cannabis is typically much cheaper when bought through illegal channels, consumers and industry watchers say. A Statscan survey in the second quarter found that legal marijuana was about 80 per cent more expensive than illegal product on a per-gram basis.

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