With all eyes on the COVID-19 crisis, the fledgling Northern Alberta cannabis industry has been slowly crawling toward some degree of normalcy.
There are now 125 cannabis retail stores in Metropolitan Edmonton, which were allowed to stay open during the virus-combating lock-down (subject to COVID distancing and other preventative measures).
Surprise, surprise, cannabis product sales have jumped, an estimated 20 per cent bump over expect
ations. If every night is a Saturday night …
While analysts gloomily say the gross revenue from 2020 Canada’s country-wide pot sales won’t be close to pre-COVID forecasts of $3.5 billion, and more likely at $2.5 billion, things are not so dire on the local scene.
First of all, last year’s start-up hiccups — licensing of pot stores, establishing rules and regulations, who does what to whom and how — have been largely sorted out.
In 2019, regular pot users were dismayed to try out the still-new retail pot stores, only to be disappointed by high prices and poor quality. The stores are only allowed to buy their product from the Alberta Gaming Liquor and Cannabis Commission (AGLC).
“Fuhgeddaboudit!” the veteran pot smokers said, returning to their back-alley black-market pot dealer for cheaper prices and better stimulants.
The AGLC still has a government-granted monopoly on the wholesale buying of pot products from licensed producers and the selling of the same to retail stores at pre-set prices and an enormous 24.3% provincial excise tax. But the AGLC bureaucracy has begun to figure out what Alberta consumers want.
The second sales booster, beyond boredom induced by home stays, is the more promising. It’s the introduction of “edibles,” also known as “consumables” — i.e. packaged pot brownies, cookies, drinks.
Legally allowed for sale now for a few months, edibles are working their way on to the shelves of the retail pot stores. The Alberta Cannabis Council — a voluntary association of all provincial cannabis players — loves consumables. Eating or drinking pot is more culturally acceptable than smoking marijuana, hence attracting a potentially much wider market beyond the long-time tokers.
On the production/cultivation side, all the news has been on the rise and fall of Big Marijuana, including Edmonton-based Aurora Cannabis, the publicly traded company whose stock soared to $13 during the excitement and euphoria of legalization.
As of this week Aurora was trading on either side of $1.
But several dozen “craft” Northern Alberta cultivators and processors have been flying under the radar. “We’ve kept our overhead low and been as financially responsible as possible,” says Tairance Rutter of specialty Edmonton cannabis grower ANC. “We’ve kept all our employees — all 10 of us — and actually hired one more.”
Acreage Pharms east of Edson, Pure Life Cannabis in Edmonton, Atlas Growers in Barrhead, Sweetgrass in Strathcona County, Lotus Organics north of Edson, Freedom Cannabis in Acheson Industrial Park, Aphelion Pharmaceuticals at the Edmonton International Airport, Destiny Bioscience in Nisku, ANC … all are hanging in as smaller growers, seed producers, systems developers, processors and makers of pot-infused edibles.
For Edmonton, Aurora is the big question mark. “All the big, big producers, like Aurora, Canopy and Sundial, started with the hype and energy of a new, exploding industry,” says a veteran of the industry. “It’s remarkably similar to the dot-com explosion of the late ’90s. There are winners and losers in the aftermath. The industry will consolidate. It has to.
“Of course Aurora is in trouble. Look at its stock price. But Aurora Sky (Aurora’s 800,000 square foot marijuana-growing facility at the Edmonton International Airport) is one of the most brilliant production models in the world. It can ramp up or down on a near-daily basis. No matter what happens to Aurora, that greenhouse would be bought or taken over. It would continue operations and would still need the expertise of its 300 to 400 workers.”
Marijuana legalization is not going to be the economic saviour of Northern Alberta. But as things settle, local cultivators will need educated and trained technologists, the retail sector will need salespeople, research will be on-going.
An educated guess? If Aurora Sky continues to be the production giant it is today, the industry will result in 1,000 to 2,000 on-going jobs in Northern Alberta.