Alberta cannabis market, only for recreational part, could be $1bn per year.
The Canadian government announced new legislation to legalize cannabis for recreational use in April 2017, paving the way for the country to become the first in the G7 to fully legalize the cannabis. The federal government legalized recreational cannabis on October 17th, 2018, but left it up to the provinces and territories to oversee distribution and sales.
A recent study from Deloitte Private results suggest that on sales of recreational cannabis alone, the Canadian marketplace could be as much as $4.9bn per year to start – a number on par with the Canadian spirit market (whiskey, vodka, rum, etc.). At the upper threshold, which takes into account the people who are “likely to consume,” cannabis sales alone could be as high as $8.7bn, similar to sales generated by wine. The potential economic impact of legalized recreational pot could be more than $22 billion, including transportation, licensing fees and security.
The country’s spirit sales totaled 18,127,362 (9 l cases) in 2016 and Alberta accounted for 2,950,420 (9 l cases) of that total, according to Statistics Canada, more than 15%. Thus, Alberta cannabis market, only for recreational part, could be $1bn per year.
Cannabis Legalization in Alberta
The Alberta government proposed framework to regulate marijuana leaves open the possibility private companies could sell adult-use products.
Based on input from Albertans, stakeholders and partners, they’ve drafted a common sense approach to managing legalized cannabis in Alberta. This includes:
- comprehensive government oversight of distribution and retail
- alignment with existing tobacco laws for public consumption
- tools to empower law enforcement and employers to ensure safety on our roads and at work
Albertans will be allowed to consume cannabis in their homes and in some public spaces where smoking tobacco is allowed, but use will be banned in cars.
Although many Albertans said they supported having cannabis cafes or lounges, Alberta will not initially have any venues specific to consuming cannabis. It was decided to revisit this issue once the system for cannabis is established and once the federal government makes decisions about edible cannabis products.
Cannabis Retail Sales Regulations:
- Albertans of legal age (18) will be able to purchase cannabis products from retailers that will receive their products from a government-regulated distributor.
- There may not be online sales of non-medical cannabis initially. It will be considered as part of next steps.
- Only specialized retail outlets will be able to sell cannabis, up to a maximum of 30 grams per purchase, and will not be able to sell cannabis if they sell alcohol, tobacco or pharmaceuticals.
Cannabis Business in Alberta
In March, Acreage Pharma Ltd. became the second licensed pot producer in the province, opening a 630-square-meter facility near the tiny community south of the McLeod River.
The four rooms where crops are propagated and raised, each containing 400 to 500 plants, are off-limits, while the space where dried cannabis will be packaged in five- to 30-gram bags for sale or processed into oil is waiting for the first harvest in July.
At average prices of $5 to $12 a gram, the annual 600 kg output could be worth about $5 million.
But that building is just the start. Company co-founder Trevor Dixon hopes to break ground soon on a larger plant beside it, and is looking at a 23,000-square-meter third phase that would place the overall development among the country’s largest cannabis producers. Phase three is projected to put out 25,000 kg annually.
Alberta’s only other licensed grower is north of Calgary in Cremona. Owner Aurora Cannabis Inc. is constructing a 75,000-square-meter structure beside the Edmonton International Airport that it calls the world’s biggest legal pot producer.
The Green Room, national cannabis dispensary chain, opens first Calgary location. Like the Edmonton location, the Calgary shop will not be selling cannabis products yet. Right now, the shop is opening as an information center.