Canada: Alberta retailer says cannabis sales leave booze in the dust

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Its cannabis sales numbers are smokin’ their booze side, says marijuana-liquor retailer Alcanna. And the more potent the pot, the faster it sells, said company CEO James Burns.

“At least initially, a lot of the customers aren’t new to the product and those people are tending to want high THC,” said Burns, referring to the psychoactive ingredient in cannabis. “But when the high THC strains run out, they’ll buy anything.”

Revenue from those pot sales — totalling $1.3 million from its five Nova Cannabis stores in the first five days of legalization — left its alcohol figures in the haze, said Burns.

The average dollar amount for each cannabis transaction is two to three times that seen in Alcanna’s Liquor Depot stores, he said. And the difference in dollars generated per square foot of floor space is “stratospheric,” he added.

“People have been buying a lot of products at once — an average of four but for quite a few people it’s more than that,” he said. “There’s the novelty and the thrill of it.” Profit margins for cannabis are slightly shy of those from alcohol sales, added Burns.

But he said those sales, which have blown past expectations, are also the result of a limited number of stores — a total of two in Calgary and only 15 others in the rest of Alberta, he said.

“There’s still lineups out the door on Day 7 . . . we thought we ordered enough product for two weeks and it lasted one,” said Burns. “But it’s early days, it’s not indicative of anything but pent-up demand.”

Lineups continued over the weekend at Nova Cannabis on Macleod Trail after the legalization of recreational cannabis on Oct. 17, 2018. 

The company’s stores — one in Calgary and four in the Edmonton area — sold 68,000 items in 17,000 transactions from Wednesday through Sunday. He said Alcanna wouldn’t normally have divulged results until the quarterly reporting cycle, but inquiries were persistent.

To bring in customers, Nova Cannabis has been offering what they call a “black market buster” discount bud priced at around $7 per gram while, in most cases, the pot is being sold in stores at between $12 and $18.

That lower price is meant to undermine the black market, said Burns, where prices are generally lower than the legal ones. Calgary’s only other legal cannabis outlet, Four20 Premium Market, has also been swamped with customers.

They chose not to divulge their early financial results. But operators of other stores that are fully licensed to open remain shut due to a shortage of product.

Distributor Alberta Gaming, Liquor and Cannabis is well aware of the situation and is hoping to receive more supply from licensed producers to pass on to retailers as soon as possible, said spokeswoman Kaleigh Miller.

“Some of the licensed producers are having trouble keeping up with the massive demands,” she said. “Retailers are being told at the get-go they’ll likely open their doors and sell accessories, but they wouldn’t have product.”

Miller said she couldn’t say when the supply situation would markedly improve, but retailers such as Burns said it might take a few months. As of Tuesday, eight stores licensed by the AGLC in Calgary await opening, as do as many as six others in the rest of the province.

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