Alberta is doing legalization right
Prior to legalization there was an expectation that British Columbia, home of the infamous BC Bud and with many stores already operating in the grey market would be the market leader when cannabis legalization hit. But this has not been the case; as we approach two years of legalization, there is no question which province has taken the reins and run with legalization... And that province is Alberta.
Alberta is home to over 500 legal cannabis retailers, far outpacing any other province when it comes to brick and mortar retailers. The 509 stores approved by Alberta Gaming Liquor and Cannabis (AGLC) make up about half of all legal cannabis retailers in the country.
Calgary is the leader when it comes to Cannabis stores in Alberta and thus the entire country. With a Cannabis store number topping 124, which amounts to almost a quarter of all Alberta retailers, with Edmonton following with 88.
With Alberta host to almost half of the legal stores in the country, some store owners in the province are raising concerns of market saturation. This issue is highlighted with five stores already going belly up as a result of factors outside of the Covid-19 pandemic. The issue of market saturation does not appear to be a concern for the AGLC, as another 200+ stores are expected to open in the near term.
Even with the high density of cannabis stores found in Alberta it still falls short of the 1,494 liquor stores in the province. The higher store count found in the alcohol industry can easily be explained by the 97 years of cannabis being illegal while alcohol was aggressively marketed towards us. We live in a marketers world and during this time alcohol became deeply engrained in our culture; whereas cannabis was stigmatized and shunned to the “criminals” in the black market and those that were willing to find a dealer to supply their product.
As the cannabis stigma fades and the population educates themselves about the benefits of this amazing plant, we believe that the number of cannabis users will come in-line with that of alcohol users, eventually overtaking it as seen with millennials and Gen Z’s already showing drastically reduced alcohol consumption. This decrease in alcohol use is largely attributed to younger generations becoming more aware of the negative health and lifestyle impacts of a heavy drinking lifestyle. With more of the negative health and lifestyle impacts of drinking coming to light, this has opened the door to healthier alternatives like cannabis to fill this void. Our prediction is that the cannabis market share will increase drastically over these initial years, eventually seeing cannabis stores succeed in the long term over liquor stores. In the meantime, this oversaturation of stores has led to a highly competitive landscape while the market waits for the remaining effects left from 97 years of prohibition to end.
The silver lining for cannabis retailers through this Covid-19 pandemic is that they have been deemed an essential service. This has allowed cannabis stores to stay open to serve their customers throughout the shutdown. Pretty amazing that Cannabis went from a prohibited substance to an essential service in less than a two-year span. Being deemed an essential service has really solidified the cannabis industry as a whole and highlighted the societal, economic, and personal benefits of this plant.
Along with being deemed essential, consumer appetite for cannabis has increased substantially as people lean towards cannabis to combat many of the side effects that a recession and lockdown can have on a person’s wellbeing. For the first time since cannabis legalization the legal cannabis market has now surpassed the black market. In 2020 the spotlight is shining on mental health and wellness and we expect this trend to continue.
Addiction is another hot topic on the forefront of people’s minds and we also believe this will play to the benefit of the cannabis industry, with numerous studies showing cannabis as a successful treatment for coming off addiction. Strange how for so long cannabis has been hailed as a gateway into drug abuse, when it could in fact be the gateway out.
At InstaLeaf we believe Alberta has done a great job of opening the doors to private business and letting the entrepreneurs do what they do best; that is to let the markets decide who comes out on top. In time it looks like the other provinces will follow suite by ramping up store openings but for now Alberta is the pack leader and Calgary is the hub, so kudos to you!
If you’re a prospective retailer looking to stick out in this highly competitive market, make sure to check out instaleaf.ca - an age platform where you can legally highlight your brand, reach your target market, and gain a competitive advantage in this highly regulated market. Any enquiries can be sent to Community@instaleaf.ca we’d love for you to be a part of our community.
And as always if you’re a customer looking to find that right strain, stores near you and join a community of likeminded Cannabis enthusiasts. Make sure to join our community by creating a free account on the instaleaf App or instaleaf.ca website online and join our movement today.
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