New bill in Alberta could shift online sales from AGLC to private retailers

New legislation tabled in Alberta could, if passed, allow private retailers to sell cannabis online. 

Bill 80, the Red Tape Reduction Implementation Act, 2021, was tabled on November 4, and includes language that would remove the AGLC’s own online cannabis sales platform, instead allowing private retailers to fill this role. 

As reported in the Edmonton Journal Finance Minister Travis Toews said the AGLC will withdraw from the online cannabis sales market 90 days after the amendments come into force meaning the sales could end by early 2022.

“In addition to being able to sell cannabis online, private operators can now sell cannabis-related items such as glassware and branded apparel. This measure not only reduces red tape, but it will help to curb the illegal trade in cannabis,” he said.

The AGLC sent out a questionnaire to retailers earlier this year gauging their interest in selling products online and in selling non-cannabis products. 

A representative for the AGLC told StratCann this summer that the agency does not have a set release date for the summary document but say it will most likely be late Fall 2021. 

Earlier this year, the province has looked at allowing greater allowance for promotional activities from cannabis retailers, but ended up deciding against it.

John Carle, the Executive Director of the Alberta Cannabis Council says it’s a good potential step in giving Alberta cannabis stores a chance to reach more consumers.

“The AGLC continues to work with industry to find ways to allow legal businesses to compete with the illicit market. These two policy changes, while not drastic, open the door for legal retailers to expand their operations and develop their individual brands.”

Raj Grover, President and Chief Executive Officer of High Tide Inc—that owns Canna Cabana and NewLeaf Cannabis that operate in Alberta—says they are pleased at the progress of this issue in Alberta. High Tide has 57 locations in Alberta currently.

“Alberta has once again shown that it is a province that believes in the free market. Today’s proposed legislation will, if passed, provide a shot in the arm to private sector cannabis retailers who, for too long, have had to compete with a government owned entity in the e-commerce space that also serves as their sole wholesale supplier,” said Grover in a press release. “Licensed cannabis retailers have proven in other provinces that we can operate online sales and home delivery in a safe and secure manner, allowing adults to have timely access to the regulated and quality-controlled products that they want while ensuring that, unlike illicit market operators, access to youth is strictly forbidden.”

Ryan Roch, the owner of Lake City Cannabis, with a location in Chestermere and Calgary, says he sees online sales helping to compete with the illicit market, and is very open to selling non-cannabis products such as apparel.

“I think it’s probably going to be one of the biggest blows to the unregulated market if we can open that up,” says Roch. “Because at that point the ease of access and convenience of a local service, there’s not much else you can fault. And as far as selling non-cannabis products, I don’t think there’s anyone who would push back on new revenue streams.”

Darren Karasiuk, the CEO of Nova Cannabis, which operates 50 retail stores in Alberta under the Nova and Value Buds brand, says they will be open to online sales, but he doesn’t see it being a significant driver of sales. Likewise, he says selling non cannabis products will likely not be something their stores focus on.

“We’ll work with the AGLC on the consultation process, whatever is ultimately in the best interest of the customer is what is in our heart of things, but our focus is on the brick and mortar side of the business.”

Alcanna, the parent company of Nova and Value Buds, also operates several liquor stores in the province, and offers online sales for liquor in Alberta. Karasiuk says this tends to not be a large portion of sales on that side of the business. 

“Alcanna offers that on the liquor side of things as a customer convenience and if that existed in cannabis we would likely do the same, although if evidence on the liquor side is any suggestion of its impact on things it wouldn’t be much. People prefer shopping more in a brick-and-mortar context. But we would certainly intend to offer it up.”

Alberta now has more than 700 private cannabis retail locations. While there are many independent cannabis stores with only one or a handful of locations, much of Alberta’s market is controlled by a handful of large chains. Nova Cannabis, owned by AlCanna, began rebranding many of their stores to the Value Buds discount brand in late 2020 and the bulk of their stores in Alberta are now under the Value buds brand, with 53 currently listed by Alberta, along with four Nova Cannabis locations. 

Behind Nova/Value Buds—according to Alberta’s public listings—Canna Cabana has 55 locations, Spiritleaf has 51, Fire & Flower have 41, Plantlife has 29, FOUR20 Premium Market has 21, Choom and Cannabis House each have 15, and Lucid Cannabis has 11.

Bill 80 is not expected to reach a final vote until the end of this year or early 2022. According to the AGLC, online sales were just 1.1% of total cannabis sales for year-to-date sales (April 1 – Oct 31) in the province.

This article has been edited to include information from the AGLC on online sales.

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