Demand for cannabis continues to outstrip supply in Alberta

“The real challenge is quite simply we’re just not getting enough stock in from the licensed producers and that’s something that all provinces and territories are facing right now.”

'The real challenge is quite simply we’re just not getting enough stock in from the licensed producers'

AGLC officials say they are working with licensed producers to increase the supply of legal cannabis. (Gosia Wozniacka/The Associated Press)

Cannabis continues to be popular in Alberta.

Since recreational sales and use was legalized across Canada nearly two weeks ago, suppliers have been scrambling to keep up with demand.

And now Alberta Gaming, Liquor and Cannabis — the agency responsible for overseeing it — is looking for more.

"I would say the initial demand has been outstanding," Niaz Nejad, a vice-president with the AGLC, told the Calgary Eyeopener on Tuesday.

Fewer than 50 retail shops have opened so far in Alberta. They are being supplied — along with the provincial government-run online portal — by 15 licensed producers.

"The real challenge is quite simply we're just not getting enough stock in from the licensed producers and that's something that all provinces and territories are facing right now," said Nejad.

Officials expect there to be as many as 250 retail shops operating in the province by the end of next year.

Customers queue outside 420 Premium Market on the first day of recreational cannabis sales in Alberta. (Colleen Underwood/CBC)

"What we've done is we've allocated a substantial amount more from our online platform … to the retailers so they can have more product to select from," said Nejad.

"Notwithstanding that, we're still running out of products."

Cannabis can be sold legally by licensed retailers in several forms, including dried flower (buds), milled flower (pre-ground bud), pre-rolled joints, oil and oil capsules.

Edibles and tinctures — concentrated extracts like shatter — won't be available for sale until next year.

And Alberta isn't the only province experiencing shortages.

"This is a countrywide challenge," said Nejad.

"We've been talking to all licensed producers regularly, in addition to the 15, but regardless, everybody is having challenges, everyone is trying to supply a finite amount of cannabis for a very, very, large initial demand. We are finding more licensed producers, but we're finding the same challenges, they can't necessarily give us the volumes we're requesting."

Rules of supply and demand

The rules of supply and demand say that when demand outstrips supply, prices go up — but Nejad said that shouldn't happen here.

"I can't speak to the other provinces [but] we have no intent of changing the prices at this point. Our focus is solely to continue to partner with the licensed producers to get more product coming in at a faster pace," she said. 

"What we've been publicly saying all along is the first few years we actually don't expect to turn a profit. It's been quite expensive to set it up and it's very capital intensive, so I think down the road we'll see it turn into something profitable."

As to who is buying cannabis — whether it's new users giving it a try or if established users are being drawn away from black market suppliers — Nejad said they haven't yet had time to do a thorough enough analysis.

"What we believe is there absolutely are some new to the category.… We are definitely taking some away from the black market, but that's anecdotal, at this point. We haven't done that analysis yet," she said.

Retail overtakes online

Illegal for nearly a century in Canada, cannabis has long had a stigma attached to it, but that seems to be lessening with legalization.

"We saw an initial surge of sales of close to $1 million on Day 1 on [the province's website]. But that has now more normalized and there's absolutely more sales happening at the retail level and you can see it by the lineups outside the stores," said Nejad.

"We've had 300 people deep in certain stores across the province at seven o'clock at night, so definitely, more folks are comfortable going into retail outlets to purchase their cannabis."

With files from the Calgary Eyeopener.