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A grow room operated by Aurora Cannabis, which plans to convert a number of liquor outlets to sell marijuana, is seen bear Crenibam Alta., in 2015.

Jeff McIntosh/The Globe and Mail

Alberta intends to limit how many retail cannabis licences one organization can hold in an effort to prevent industry powerhouses from dominating a market that is scheduled to be legalized later this year.

No person or group will be allowed to hold more than 15 per cent of the licences, the provincial government announced on Friday. Further, the proposed rules give the government power to set a floor price for recreational marijuana. The province estimates roughly 250 private retail marijuana stores will set up shop within its borders in the first year.

The proposed regulations, according to Alberta, are designed to ensure public safety, shrink the black market and give small businesses a toehold in the sector. Ottawa had planned to legalize recreational cannabis by July 1, but now acknowledges the market won't open until August or September. It is up to the provinces to address finer details such as age restrictions, much like liquor laws.

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"This is a brand-new market and we want to make sure everyone has the opportunity to participate, from very small entities to large entities," Kathleen Ganley, Alberta's Minister of Justice, told reporters on Friday as she explained why the government restricted the amount of licences one outfit can hold. "This ensures that no one is going to corner the market right away."

Alberta capped licences at 15 per cent, she said, because that mirrors the government's estimate on what the province's largest liquor retailer holds. The Alberta Gaming and Liquor Commission will be responsible for licensing, overseeing the distribution of packaged and sealed products, monitoring prices and operating government-controlled online cannabis sales. The AGLC has yet to set its price rules.

An executive with Alberta's largest cannabis company said he is pleased with the market structure, which takes cues from both Alberta's privatized liquor industry and from other jurisdictions that have legalized marijuana.

"To Alberta's credit, they haven't reinvented the wheel. They've created a regulatory system designed to be efficient and also protect public health and public safety," said Cam Battley, chief corporate officer at Aurora Cannabis Inc.

"They've struck a balance in a rapidly evolving space. They've given municipalities a certain amount of control over what retail will look like in their cities and towns."

Aurora, which is building a massive cannabis greenhouse at Edmonton International Airport, struck a $104-million to deal to buy a 19.9-per-cent stake in Liquor Stores NA, the largest booze retailer in the province. With the deal, the company aims to convert an unspecified number of liquor stores to cannabis outlets. Mr. Battley said the new Alberta regulations, including the 15-per-cent limit on licences, should not affect the plans.

"I think this is a system in which we can work and thrive," he said. "If you take a look right now at [liquor stores], they have 12 or 13 per cent of the retail stores in Alberta."

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The government estimates the cost of legalization will exceed tax revenue in the initial years, Ms. Ganley said. Expenses include the cost of setting up regulations and policing.

The provincial government intends to ban cannabis sales from places that also sell alcohol, pharmaceuticals and tobacco. The alcohol restriction aligns with British Columbia, Manitoba and other provinces. However, some governments such as Nova Scotia have decided otherwise. Other rules across the country differ. Quebec, for example, intends to sell recreational marijuana through a government agency, and Ontario plans provincially run stores.

People will have to be at least 18 to buy, use and possess cannabis in Alberta.

Ms. Ganley said cannabis and alcohol cannot be sold at the same location because when those products are consumed together, there are "significant" health concerns and it has a "cumulative impairment" effect.

"What we would like to do is create a sort of clear separation in people's minds – that these things are not necessarily best used together," she said, acknowledging that adults can still make their own consumption choices. Retailers must be at least 100 metres away from schools and provincial health-care facilities, the government said, but municipalities will have the power to adjust this buffer.

Ahead of marijuana legalization, traditional crops are being traded in for cannabis plants at Canadian greenhouses. The COO of legal pot producer Newstrike says crop turnover in the greenhouse industry is common. The Canadian Press
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