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Cannabis Canadian private retailers warn of shortages in first weeks of legalization

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Amy Stevens of Fire & Flower Cannabis prepares the shop for opening day, in Edmonton Alta, on Wednesday Oct. 10, 2018.

JASON FRANSON/The Canadian Press

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Only a small number of stores will be open to sell cannabis on Wednesday in provinces that have allowed private retailers, and while shop owners say they are ready, they are also forecasting shortages in the coming weeks.

Five provinces have invited the private sector into the cannabis retail market, but only three will have any stores open on Wednesday: 17 in Alberta, seven in Saskatchewan and four in Manitoba. A government retail store will open in B.C., and Ontario does not plan to have bricks-and-mortar locations before April.

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The stores have warned their inventory could run low soon because producers are having difficulty supplying them. Retailers are worried about steep demand and little competition to pick up the slack. The supply constraints extend beyond those private retailers, with online exchange Cannamerx estimating that licensed producers who do not have enough to fulfil their contracts were seeking 30 tonnes of product on the eve of legalization.

Ryan Kaye says he is preparing for people to line up overnight for the 10 a.m. opening of the Four20 cannabis market south of downtown Calgary. With only two cannabis stores in total in Alberta’s largest city on the first day, high demand could lead to shortages.

But Mr. Kaye, a vice-president of Calgary-based Four20, said he is not concerned for the long run.

“I think we’re going to be okay,” he said. “There’s going to be some swings in supply in the next few months. I can see that there will be some intermittent product shortages over the next year, but it’ll normalize and pricing and supply will settle down.”

The Alberta Gaming, Liquor and Cannabis Commission (AGLC), the government’s cannabis wholesaler, had said shortages may occur in the coming weeks, with up to 100 more stores expected to open over the first 30 days of legal sales.

“We don’t know what demand will be,” said Alain Maisonneuve, the chief executive of the AGLC. “We probably won’t get it perfectly right over the medium term, but we’re quite confident that we’ll have enough to satisfy needed supply and work to see what demand comes.”

Mr. Maisonneuve said 13 of the 15 licensed producers supplying Alberta have delivered what was ordered, and the remaining two should fulfil their contracts by November.

Alcanna Inc., formerly Liquor Stores N.A. Ltd., has licences to operate five of the Alberta stores that will launch on Wednesday, but CEO James Burns said it was able to buy only about half of the cannabis it would have liked from the AGLC.

National Access Cannabis plans to open one store in Winnipeg on Wednesday, but not until late afternoon as it attempts to secure more inventory, CEO Mark Goliger said.

“We don’t expect to fulfil demand” at the start, Mr. Goliger said.

Cannabis retailer Fire & Flower plans to have three stores in Alberta and two in Saskatchewan open on Wednesday, and 15 in all by the end of this month, CEO Trevor Fencott said.

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Fire & Flower, an Edmonton-based retailer with four cannabis producers among its investors, has found it easier to stock its Saskatchewan stores because retailers there buy directly from the growers.

“Having industry relationships helped us,” he said. “The two Saskatchewan stores will have product on Day 1.” But he added the three Alberta stores are fully stocked. “We do think there is going to be a high demand given the comparatively small number of locations that will be selling.”

Fire & Flower has fewer types of items than it would like – about 85 in Alberta, rather than its goal of 300, he said. But over time, different offerings will become more plentiful, he said.

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