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Cannabis Alberta hits pause on retail cannabis licensing as supply issues persist

Part of cannabis and small business and retail

Alberta will temporarily stop issuing licences to sell cannabis and is rationing supply amid a countrywide marijuana shortage.

Alberta Gaming, Liquor and Cannabis (AGLC) said Wednesday that it had received just 20 per cent of the marijuana it had ordered from growers as of Nov. 17 − one month after the sale of recreational cannabis was legalized. As a result, AGLC said that it was also halting the application process for an unspecified period. Applicants will be allowed to withdraw and receive a full refund, it said.

AGLC doesn’t know when it will start issuing licences again.

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“When there could be some projections that there’s going to be some stability in the supply, that’s when we will reassess,” spokeswoman Heather Holmen said. “That could take a few weeks, or a few months, or maybe even little bit longer.”

Alberta’s freeze on new retail licences comes amid a product shortfall that has closed retail stores in Quebec and other provinces, and left some medical users without timely access to the strains of cannabis and oils they need. Tilray Inc., for example, has been running low of much of its medical product for weeks and is still sold out of flower.

Raj Grover, chief executive officer of High Tide Inc., poses in the Canna Cabana cannabis store in Calgary on Nov. 21, 2018.

Todd Korol/Globe and Mail

AGLC says it ordered enough product to support up to 250 stores for the first six months. As of Nov. 17, it had issued 65 retail licences and received one-fifth of the cannabis, measured by weight, that it ordered. AGLC has started rationing how product is allocated to retailers. Earlier this year, growers assured provincial wholesalers that they could supply their market with a certain amount of cannabis, but have been unable to deliver.

Raj Grover, chief executive officer of High Tide Inc., which operates under the banner Canna Cabana, has three marijuana shops already in the province and is opening a fourth this Friday with accessories and a “minuscule amount of cannabis." Mr. Grover’s plans to expand his chain are in limbo: He was expecting to get his fifth licence soon and is building another 25 locations across Alberta, sinking about $370,000 into each of them.

“It’s a big bummer. We paid a lot of money to build these stores, spending money at lightning-fast pace. And the staff that we’ve hired, we can’t employ them," Mr. Grover said Wednesday by phone. "But the other headache is who wants to open stores without any cannabis? It’s a double-edged sword.”

AGLC is the only wholesaler of cannabis in Alberta and it signed contracts to buy marijuana from 15 growers. “The AGLC has spoken to every LP [licensed producer] in Canada," Ms. Holmen said. "It’s definitely a crunch across the country.”

Retailers, which are owned by the private sector, can only source product through AGLC and can’t buy directly from growers. AGLC is also Alberta’s only legal online retailer of cannabis and its website is littered with the words “out of stock.”

Alberta recently changed how stores can buy product from the province. AGLC said it has moved away from a first-come, first-served system in which retailers raced to secure product online. Now, the province is attempting to evenly divide available inventory among interested retailers.

“The LPs [licensed producers] have blindsided us,” said Mr. Grover of retailer High Tide, adding that cultivators Aurora Cannabis Inc., Canopy Growth Corp. and Aphria Inc. have been supplying the most amount of product into Alberta.

“Everybody else is negligible. I wouldn’t even count that as variety.”

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