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Companies selling recreational cannabis in Alberta are set to rapidly expand their number of private retail stores in the coming months, shrugging off concerns about a supply shortage viewed as a short-term hiccup in the new industry.

Shop owners expected strong demand the first few days, but were surprised by how quickly their products sold after recreational marijuana was legalized last week, forcing some to temporarily close as they were unable to replenish stocks fast enough from Alberta Gaming, Liquor and Cannabis (AGLC), the government agency and sole wholesaler for retailers in Alberta.

Alcanna Inc., Canada’s biggest private-sector alcohol retailer that opened five NOVA Cannabis stores in Alberta on Oct. 17, said in a press release that these new outlets rang through roughly 17,000 transactions worth about $1.3-million in combined revenue in the first five days of operation. Most sales were dried cannabis flower, with strains high in THC the most popular.

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“I think the supply thing is a relatively short-term issue,” Alcanna chief executive officer James Burns said.

“The bulk of people that came through the doors in the first five days were not new consumers of the product. These were people who knew what they wanted and they wanted the high-potency product.”

Alcanna added that the average dollar amount of each transaction at its NOVA stores was two-to-three times larger than an average sale at one of its Liquor Depot deport stores.

The number of licenses granted so far to sell recreational cannabis in Alberta, expected to be one of Canada’s main retail markets, is already at 31, according to the AGLC.

Unlike some smaller stores that ran out of supplies, NOVA had enough to stay open and has new deliveries on the way, Mr Burns said, adding that the company intends to open a total of 37 stores over the next five months.

“We’ll probably have a dozen by December. We anticipate having our full complement of 37 stores by the first quarter of 2019,” Mr. Burns said.

The AGLC has said that a single company cannot hold more than 15 per cent of retail cannabis licenses in Alberta, which would equate to 37 stores if the estimated 250 stores open in the first year.

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Also undeterred by dwindling supplies, Four20 Premium Market opened last week in Calgary and has plans to open “several dozen” more stores throughout Alberta within a year, said Ryan Kaye, vice-president of operations of the privately held company.

On Monday, Four20 ran out of flower, although a shipment was set to arrive within days and the store still had oils available, Mr Kaye said.

“It’s a short-term problem,” Mr. Kaye said about tight supplies.

Some stores have, however, completely run out of cannabis products while awaiting their next delivery. NUMO Cannabis in Edmonton, an independent company that has not applied for a second license, closed Friday afternoon when its supplies were depleted. NUMO reopened Saturday to sell accessories and provide industry information to inquiring customers while awaiting a shipment expected this week.

“There are some days we feel like we are a bit left out because the big guys still have supply and continue to receive supply,” said Ryan Seeras, chief marketing officer for NUMO.

“We’re definitely hoping for another store but we’re going to take our time with it and not rush.”

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