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Red tape remains ‘burden’ on small-town Alberta cannabis stores in five years since Canada legalized pot, owners say

Pries, who owns Strathmore’s The Garden Cannabis Co. along with husband Cole Bosnick, said the independent store has been able to hold its own since opening in January 2019. The store was the first to open in Stathmore, 50 kilometres east of Calgary, and five years after cannabis was legalized in Canada, the local market in the town of 14,000 now includes six stores

Being owner-operators and having a small store have cut down on costs, and have allowed them to remain in business, said Pries.

Less red tape would help the independent business stay afloat, said Pries, who has plans to expand.

“It’s obviously clear that some of those companies are not profitable,” she said. “I don’t want necessarily a minimum price set, but if it was a thing that you actually had to make some money, it would be a little more fair for people like us.”

Another southern Alberta retailer, with stores in six small towns as well as three in Lethbridge, says its rural southern Alberta stores do “quite well, but “many pieces” of red tape could be removed to make it easier to do business.

“It takes a little bit of time for (the cannabis industry) to normalize and then we’ll loosen the strings a little bit,” said Blaine Emelson, chief commercial officer for Bud Supply, which has stores in Coaldale, Claresholm, Fort Macleod, Pincher Creek, Taber, Vulcan and Lethbridge. “Five years in, it’s probably a good time for (government) to take a hard look at some things, like excise taxes.”

“2023 has been a good year, especially for small retailers,” he said. “The tide has been turning back in our favour. The big guys are starting to play a little nicer.”

One of Canada’s largest retail cannabis operators says changes are needed to help the industry as a whole.

Alberta’s markup on cannabis products under fire

Omar Khan, chief communications and public affairs officer for the publicly traded High Tide Inc., which has 78 retail stores in Alberta under its Canna Cabana brand, said the province should eliminate the six per cent wholesale markup on cannabis products that regulator Alberta Gaming, Liquor and Cannabis (AGLC) charges and which gets passed on to retailers.

“We feel it is an unnecessary cost burden on an industry that quite frankly is struggling to survive right now,” he said.

Alberta could also consider allowing retailers to cut out the middleman — the AGLC — and purchase their product directly from producers, which is the situation in Saskatchewan, said Khan. That would lead to lower prices for consumers, said Khan.

“We genuinely feel that, particularly the premier and (Dale Nally, minister of Service Alberta and Red Tape Reduction), want to see the industry success because it employs a lot of Albertans,” said Khan, adding High Tide alone employs roughly 600 Albertans. “And we want to keep that employment footprint, but to make this industry sustainable, we do need some further changes from the government.”

In a statement to Postmedia, a spokesperson for Nally said the minister is in discussion with the cannabis industry to hear their perspectives about what is working, and where there might be opportunities to reduce unnecessary red tape.

“We want cannabis businesses to have the tools they need to succeed and grow, and we want Albertans to continue to be able to responsibly and safely enjoy the products and services they offer,” said Nicky Gocuan, press secretary for the Service Alberta and Red Tape Reduction ministry.

Alberta’s government has started making changes to reduce red tape in the cannabis industry, he said. Those changes include reducing the listing fee that licensed producers must pay to register their product to $250 from $1,500 per stock-keeping unit, changing the age verification procedure to align with the rest of Canada and amending cannabis signage to align with liquor.

“We will continue to make improvements while ensuring the health and safety of Albertans,” said Gocuan.