'Nothing's for sure,' warns Alberta cannabis regulator as retailers seek space

One cannabis retailer says taking the risk that a location may not be approved is worth it to get a headstart before legalization.

For licence to sell, companies must have lease promised — but some are renting now

A budtender displays cannabis for sale at a dispensary. The Alberta Gaming and Liquor Commission is recommending proposed cannabis retailers secure a promise of a lease in order to avoid paying rent on a space that may not be approved. (CBC)

Alberta's regulator of cannabis retailers is warning against renting shop space before receiving a licence.

Recreational use of the plant, long considered an illicit drug, is expected to be legalized July 1. The legislation passed its second reading in Senate on Thursday.

Before this happens, the Alberta Gaming and Liquor Commission (AGLC) is taking applications from retailers hoping to sell cannabis in the province. To do so, they must demonstrate a proof of an offer of a lease at minimum.

But some, like NewLeaf Cannabis, have already started renting space — and advertising — before the licences are issued.

"He's obviously fully signed and invested in those locations," commission spokesperson Michelle Hynes-Dawson said Thursday. "The only thing we would caution is, nothing's for sure."

Wait for city rules

The AGLC started accepting applications earlier this month, but approvals hinge on municipal bylaws, few of which are for sure at this point. In Calgary, cannabis-related bylaws aren't expected to be established until the end of April.

Each application will also go through a public consultation period, where community members can write in on their thoughts on the proposed location.

That means some retailers, Hynes-Dawson said, could see their proposed shops rejected. If that's the case, or the retailer has to change location for another reason, the commission will process the changed address at no additional cost, she said.

'That's the risk'

That's a calculated risk NewLeaf Cannabis has purposely taken, chief administrative officer Angus Taylor says. Since September, NewLeaf Cannabis has been renting space for some of the 22 shops it hopes to gain permission to open.

"Finding prime locations for our stores was something that we thought was a competitive advantage if we started early, so that's what led us to make those commitments when we did," Taylor told the Calgary Eyeopener.

"We've been paying rent in a number of locations, yes. I suppose that's the risk entrepreneurs bear when they're trying to find a location for their store in advance of licensing."

Angus Taylor is the chief administrative officer for NewLeaf Cannabis, which has applied to open 22 stores across Alberta. (CBC)

The company is hoping to hire more than 200 people and be ready to go as soon as it's legal to sell, he said. The store signs should also help, he said, encourage neighbours to approach the company directly with any questions.

Battle for licences

The province has said it will issue 250 retailer licences across Alberta.

As of Tuesday, the commission had received 204 applications. Almost 60 had passed background checks, and were posted online for people to review. Albertans can now comment on the proposed locations for 18 shops in Edmonton, 10 in Calgary and 31 others spread across the province.

Each licence application costs $400, plus a $700 annual charge and $3,000 for background checks, and requires that promise of a lease and municipal approval.

Frederick Pels, CEO and president of the Green Room, said showing a lease has been signed would go further to prevent "fly-by-nighters" who might blemish the industry, which he said is key given the limited number of licences available.

"I think it's important before [AGLC] spend their time time and due diligence in investigating somebody that they're actually going to be opening a marijuana distribution or retail," Pels said. "And I think a good measure of that is whether or not they've committed to a lease."

His company has rented storefronts in both Calgary and Edmonton with the standard five-year business lease, despite the chance AGLC might reject those locations.

"Business is risk and it's calculated, and decisions have to made," Pels said.

The licensing process is expected to take two to four months, the commission said. Legalization is due in just over three.

With files from the Calgary Eyeopener.