As pot store approvals in Alberta continue to climb, several cannabis retailers in the province appear to have closed their doors, at least temporarily. However, several retailers and industry participants say they don’t believe Alberta is anywhere near reaching a saturation point for retailers.
A Hobo Cannabis location in Lethbridge at 305 6 St South, and a Choom Cannabis in Airdrie at 302 2903 Kingsview Blvd, were both removed from Alberta’s list of approved retailers over the weekend, bringing the number temporarily down to 491 retailers from a previous 493.
Both stores are listed as “temporarily closed” on their company websites, although sources close to both locations say the stores have closed their doors. The Hobo location in Lethbridge had previously been called Amsterdam Fog Cannabis Culture before changing owners and name to a Hobo location.
In addition, a Spiritleaf location in Canmore at 737 7 Ave Unit 112 was removed from Alberta’s website in mid June. Spiritleaf also lists this location as “temporarily closed” on their website, due to Covid-19. Choom currently lists six of their Alberta locations as temporarily closed, although many of these locations are still listed on Alberra’s website.
I think the bigger question is not whether there will be more closures, I think the bigger question is how many total retailer locations there will be in the province.John Carle, Alberta Cannabis Council
Neither Choom, Hobo, or Spiritleaf responded to Stratcann’s request for comment by press time.
Choom and Hobo are national retail chains with locations in various provinces. Choom has 15 other locations in Alberta and 108 across Canada, while Hobo has two in Alberta and 17 across Canada. Spiritleaf has 41 locations in Alberta, four in BC, and one in Saskatchewan.
Lethbridge currently lists 22 retailers and Airdrie lists 11. Canmore has four other retail locations, including one other Spiritleaf. All locations have other cannabis stores within a short walking distance from the closed ones.
One local Canmore retailer who StratCann spoke with, but asked to not be quoted on record said they believe Canmore has reached a saturation for cannabis retailers, and that the location closed so as to not cannibalize business from the other Spiritleaf retailer just a few minutes drive away.
A person who has a terrible development plan, overspent developing their retail store, and are awash in debt and have no idea how to run a business, they will close, and then open up opportunities for others to enter that market. That’s a healthy environment. It’s to be expected.JOHN CARLE, ALBERTA CANNABIS COUNCIL
Alberta has been the frontrunner for all Canadian provinces and territories when it comes to approved retailers, far surpassing larger provinces like Ontario, and even neighbouring British Columbia. But as retail approvals climb, the potential for over-saturation increases. Although cannabis sales have not been negatively impacted by Covid-19, with retailers in most provinces, (including Alberta) deemed essential services, broader economic challenges in regions hard hit by stay at home orders and economic downturns could potentially see more closures in the future.
John Carle, of the Alberta Cannabis Council says high taxes in Alberta make competing with the black market challenging, but that he thinks the entire retail market in Alberta is nowhere near saturation.
The biggest challenge facing Alberta retailers is the current level of taxation,” says Carle. “Alberta has some of the highest tax rates for cannabis in the country and this makes it difficult to compete with the black market.”
“But in any healthy market environment, there will be companies that don’t survive and there will be companies that grow and expand,” he continues. “I think the bigger question is not whether there will be more closures, I think the bigger question is how many total retailer locations there will be in the province. A person who has a terrible development plan, overspent developing their retail store, and are awash in debt and have no idea how to run a business, they will close, and then open up opportunities for others to enter that market. That’s a healthy environment. It’s to be expected.”
…if their business plan isn’t accurate or they don’t understand the community that could be an issue, more than over saturation.Tim Raho, Made in Cannabis
Tim Raho, the owner at Made in Cannabis in Edmonton, says he agrees that there is still plenty of opportunity for retailers in Alberta, but speculates that some larger chains may be moving on to more lucrative markets.
“I know a lot of the big players are uprooting and heading for Ontario because there’s bigger numbers there,” says Raho, “so I wouldn’t be surprised if those locations were maybe losing money and felt it made more sense to move in that direction. And if their business plan isn’t accurate or they don’t understand the community that could be an issue, more than over saturation.
“It was a difficult beginning, but now that we’re established, it’s going quite well,” he continues. It’s kind of like playing the lottery every week in terms of getting good products, and we don’t have a lot of freedom in how we operate so we’re not all getting rich, but it’s a pretty sweet gig. It’s not a get rich quick scheme but we’re doing well.”
“Eventually, give us five years, I think we’ll be bigger than alcohol.”