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  1. AGLC cannot guarantee cannabis supplies will continue to rise
  2. Provincial online retail store shows 375 pot products for sale, up sharply from 65 in November
  3. Retail chains optimistic pot supplies will keep rising as LPs raise output

After months of insufficient pot supplies led to poorly stocked shelves at some retailers and prevented others from opening their doors at all, legal inventories in Alberta have surged.

While store owners expect wholesale volumes will keep rising even as dozens of new outlets open over the next few months, the provincial wholesaler would not guarantee continued supply growth and urged caution.

Estimates from two retailers peg Alberta Gaming, Liquor and Cannabis (AGLC) supplies of dried flower and pre-rolls last week at a wholesale value of around $50-million. That’s up from just $6-million in early April, based on calculations from AGLC weekly order sheets.

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The increase is so substantial that, even with a jump in store numbers after AGLC lifted its moratorium on new retail cannabis licences, individual store allocations have also surged, according to large retail chains. The increased wholesale purchases for individual stores come as the jump in Alberta outlet numbers initially raised concern that per-store allocations would shrink.

Alberta privatized retail cannabis and hosts by far the most outlets in Canada. As of last week, it had granted 176 store licences.

“Each licence was allocated approximately eight times more in dry flower than they were back in April, which are the products in most demand,” said Rob Cherry, general merchandise manager for Edmonton-based retail chain Fire and Flower.

“We have seen a significant improvement in recent weeks in (the) amount of product available from AGLC as well as the quality of product. We are hopeful and optimistic that this will continue given the amount of licences they are now issuing each week combined with the fact that we have been receiving our requested orders more or less in full recently," Mr. Cherry said.

Higher legal cannabis supplies in Alberta come as Statistics Canada data show the number of Canadians who reported buying pot illegally was on the rise.

AGLC is Alberta’s retail cannabis regulator and sole pot wholesaler. A national shortage of legal recreational cannabis caused AGLC to place a freeze on new retail licences in November 2018, when stores were running out of supplies between weekly deliveries.

In late-May, improved supplies meant AGLC could resume issuing new permits and it granted 75 over the next six weeks with dozens more expected in the weeks to come. The move came as AGLC lifted its list of suppliers to 31, up from 15 in 2018. The number of active licensed producers, however, dropped to 30 last week when CannTrust Holdings Inc. halted its sales due to a Health Canada probe.

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“Ever since April, we’ve seen week-over-week increases,” said Theo Zunich, chief executive of YSS Corp., which so far has four stores open in Alberta.

Mr. Zunich said he had no supply concerns going forward as licensed producers are increasing their production.

“I’m not concerned at all, I’m excited. It’s resulting in increasing sales despite increased competition which is a good indicator that, maybe we’re just on the cusp of starting to access some of the black market.”

An AGLC spokeswoman did not know the size of its wholesale inventories, but the agency’s online retail store showed 375 products were available. This compares with 65 in November when AGLC placed a freeze on new retail licences, according to one retailer.

“Although the product shipments we have received have increased steadily, licensed producers cannot guarantee this will continue or be sustainable,” said AGLC spokeswoman Heather Holmen.

“While optimistic, we wouldn’t speculate on the future of supply.”

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But while AGLC cannot guarantee licensed producers will continue to increase their supplies and varieties, retailers are optimistic, despite the many hiccups already experienced by the new industry that launched in October 2018 when recreational pot was legalized in Canada.

“The stock is only going one way and it’s going up,” said Raj Grover, chief executive of High Tide Inc., which owns Canna Cabana. There are seven fully operational Canna Cabana stores in Alberta with three more slated to open by the end of July.

Darren Bondar, chief executive of Inner Spirit Holdings Inc., which currently has eight Spiritleaf stores open in Alberta, said the outlets now have 28 different varieties of pre-rolls and 110 varieties of dried flower in stock.

“I believe supply and selection will continue to increase as more LPs get their product to the markets,” Mr. Bondar said.

As recently as March, many retailers were only able to order small quantities of sought-after pre-rolls and dried flower, with customers lining up on delivery days to buy the scarce and most-popular products.

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