Alberta lifts cap on percentage of cannabis market retailers can own

Alberta is removing a cap preventing cannabis retailers from owning 15 per cent or more of the market.

Business owner criticizes government for lack of communication on issue

Cannabis retailers can now control more than 15 per cent of the licenses provided by the Alberta government. (Robert Short/CBC)

Alberta is removing its cap on cannabis stores around the province to allow companies to take up more of the market share.

At the end of September, the provincial government amended the Gaming, Liquor and Cannabis Regulation to remove a restriction that previously prevented any one person or group from controlling more than 15 per cent of cannabis licenses issued in Alberta.

The government introduced the 15 per cent cap prior to cannabis' legalization in October 2018. Heather Holmen, spokesperson for Alberta Gaming, Liquor and Cannabis, said Friday the change was made to allow smaller players to enter the market.

Currently, the cannabis retailers with the biggest share of the market include Spiritleaf, Fire & Flower and Nova Cannabis. Each make up more than five per cent of the 527 cannabis providers found in Alberta, according to the AGLC's online database.

Holmen said prior to legalization, the government committed to reviewing the 15 per cent cap within five years of its introduction, once the market was established.

"Removing the ownership cap is part of government's red tape reduction strategy aimed at creating new opportunities for businesses in Alberta and removing unnecessary regulatory barriers," she said via email.

"Removing the ownership cap helps cannabis retailers promote a healthy retail trade that can compete with the illicit market on price, which helps protect Albertans."

More communication needed, says retailer

Kyle Murphy, president of Firestone Cannabis, said the change could present opportunities for retailers of all sizes. 

Firestone has licences for four stores around Alberta, including one in central Edmonton, and is a member of the Alberta Cannabis Council. Murphy said he thinks the province has so far done a good job in making cannabis available around Alberta since legalization.

But he said he was surprised to hear the change was happening with seemingly no consultation. Murphy said this could shake the confidence of an industry that's being built from the ground up, and that he'd like to see better continuity and communication between the government and cannabis businesses.

"We all build our businesses based on the rules of the game," he said. "For that to be changed literally overnight affects not just myself but everyone in the industry, big and small."

In an email Monday, Holmen said the provincial government had stated it would re-evaluate the cap at the time of legalization but did not mention a consultation process.

Hunter McColl, one of the owners of Armstrong Block Cannabis in downtown Edmonton, said he doesn't think the change will affect his business too much.

The store, owned by McColl and his brothers, opened in May after beginning the process in 2018. And while larger stores with more money could buy up locations from smaller independent stores, McColl said he'd only be worried about how their business will be impacted if it suddenly becomes easier to acquire a licence from the province to sell cannabis.

"Not unless the AGLC makes the process to apply a lot easier, take less time," McColl said. "It is quite a process, start to finish, to get a licence, location set up and ready for business."'

The change won't affect the number of licences issued, according to Holmen.


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