- Ontario’s 18 pot stores are able to order up to 25 kg of product weekly
- At least two Ontario cannabis outlets cut hours due to supply shortage
- Alberta store owner estimates AGLC inventories up in May versus April
Recreational pot store owners in Alberta are seeing cannabis supplies rise even after a 35 per cent boost in venue numbers, a sign that licensed producers have increased their output seven months into legalization, but reduced hours at some Ontario outlets due to empty shelves show the crunch has shifted to Canada’s newest – and biggest – legal marijuana market.
In Hamilton, Ont., a new Canna Cabana recreational pot store will start closing on Sundays due to tight supplies, said Jason Kostiw, spokesman for High Tide Inc., which owns the brand.
“The closure is directly related to a shortage of desirable product for sale. Typically the store will go through 5 kilograms of product per day, so it goes through the (weekly) 25 kg allotment fairly quickly,” Mr. Kostiw said.
Ontario’s second Canna Cabana store, in Sudbury, remains open every day, he said.
Hobo Recreational Cannabis Store, which has two venues open daily in Vancouver, has reduced operational hours in its new Ottawa outlet and is now closing on Wednesdays, according to its website.
Other stores, such as Ganjika House in Brampton, have not reduced hours, but are dealing with shortages of high-quality product.
“It’s not necessarily the quantity of supply, as the quality of the supply,” said Clint Seukeran, the owner of Ganjika House. “The highest moving SKUs, products that are high THC, low-price, we’re not getting enough of that."
The initial product Ganjika House received after opening on April 1 was particularly low quality, Mr. Seukeran said. But it is improving.
“The new supply comes in on a weekly basis, and it is getting better. We were selling product in April that was packaged in August of last year... That product has sort of gotten out of the system. Since then we’ve had more product that’s more recently packaged,” he said.
Relm Cannabis Co. in Burlington, likewise, has to manage its limited supply carefully throughout the week, according to Sid Commisso, the store’s general manager.
“We have looked into adjusting hours, but we haven’t done it yet because the OCS [Ontario Cannabis Store] has been super helpful with making sure we don’t get into that situation,” Mr. Commisso said. “A couple times they’ve given us an extra allotment, or they made sure we didn’t have to get to that point.”
This shortage of legal pot comes as Ontario has only 18 retail stores that are each able to order 25 kg of cannabis weekly. This compares with Alberta, where the population is just 30 per cent of that in Ontario and has 101 licensed stores that are typically able to access a maximum of roughly 15 kg each week.
However, stores in Alberta often sell out of the most popular items, such as high-THC dried flower and high-CBD capsules, within hours or days of their weekly delivery.
But while just a handful of Ontario stores have opened since April through a lottery process that was aimed at preventing too many venues opening in relation to available product, the slightly more mature market in Alberta appears to be working through its growing pains.
Initially, the national supply shortage was so severe that Alberta Gaming, Liquor and Cannabis (AGLC) placed a pseudo-moratorium on new retail licences in November to ensure it had enough cannabis to sell to stores that had already opened. AGLC is the province’s sole wholesaler and it has since upped its number of LPs to 26 from 15 in December 2018, and issued 36 new retail licences to bring Alberta’s store tally to 101. This is by far the largest number of pot shops in one province.
“Things are still looking up from (an) inventory perspective. Red Deer’s weekly allocation has been unchanged in the $60,000-$65,000 (per) store range despite the new licenses,” said Theo Zunich, chief executive of Solo Growth Corp., which owns one licensed pot store in Red Deer, Alta.
“As a company with six inspected stores and one more soon to be added, we feel the challenges like everyone else waiting on licenses but the indicators are that supply is coming and with it, new licenses.”
Mr. Zunich estimated that AGLC’s aggregate inventory of dried flower and pre-roll products has been worth more than $8-million wholesale the last couple weeks versus the $5-million to $6-million range seen in March and April. This estimated inventory increase came after 26 retail licences were issued and new store owners placed their first wholesale orders.
An AGLC spokesperson did not respond to a request for comment in time for publication.
“The supply has actually been steadily rising since late 2018. Even the addition of 26 licences didn’t have the impact we worried it might,” said Mr. Kostiw of Canna Cabana, which has four stores in Alberta.
The latest Statistics Canada retail data showed cannabis receipts in March rose above $60-million, the highest monthly total so far for legal pot sales and up 17 per cent versus February.
Still, industry growth is hindered by a lack of physical stores, shortages of finished inventory, low levels of consumer education and awareness, and limited product choice, according to a report by Eight Capital.
“We estimate 267 (recreational) stores were open by the end of April, up 30 per cent from 205 stores in March,” Eight Capital said.
“Heading into summer, multiple facility expansions are expected to ramp up significantly, which should help to alleviate supply shortages and support brick-and-mortar infrastructure, as well as enhanced product availability.”
- With files from Mark Rendell