Legacy and legal cannabis sales three years after legalization?

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The CCSI was assessed at C$5.03 per gram this week, up 0.6% from last week’s C$5.00 per gram. This week’s price equates to US$1,815 per pound at the current exchange rate.

Each week, Business of Cannabis delivers a series of insights from our partners at Cannabis Benchmarks®.

Today, Cannabis Benchmarks focuses attention on Alberta, one of the stronger performing cannabis provinces when it comes to retail licensing and sales. That trend may be reinforced with the introduction this month of Bill 80, the Red Tape Reduction Implementation Act, 2021. The bill proposes nine legislative items, including one that allows licensed cannabis retailers in Alberta to develop an online presence.

Currently, Alberta has a private model for physical recreational cannabis retail sales and a government-regulated model for online sales. All cannabis retailers must be licensed by Alberta Gaming Liquor and Cannabis (AGLC).

The AGLC also plays another critical role in the cannabis sector by purchasing cannabis products wholesale from 17 licensed producers. AGLC is then responsible for warehousing and reselling to licensed retailers and consumers through its online platform. In this model, the government is both the wholesaler and competitor to privately-run retailers.

With Bill 80, any existing physical stores will also have the ability to sell cannabis direct-to-consumer via e-commerce. To date, the government-run online stores have a clear advantage as they can cut out many of the overhead costs that retail stores currently face. This enables the Alberta online store to routinely sell the same products at a lower price point than private brick-and-mortar retailers.

One of the positives that might occur if the bill is passed is a bigger push against the illicit cannabis sector, which currently makes up an estimated 41% of recreational cannabis sales at the national level. Cannabis Benchmarks do not have any specific data on Alberta, but they believe that Alberta’s illicit market share is smaller due to its robust retail footprint.

Source: Canada Cannabis Spot IndexCannabis Benchmarks

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