On Oct. 5, 2017, a number of licensed producers formed the Canadian Cannabis Co-op in response to the Alberta government’s framework on cannabis legalization that was released the day before.

Alberta considering private retail model

The Canadian Cannabis Co-op is urging Alberta to adopt a private retail model for cannabis that is similar to Alberta’s liquor system. The co-op says its proposed retail model won’t cost or risk the government anything because the co-op would cover the millions in upfront costs of creating the 50 or so dedicated dispensaries they have proposed.

The Pitch: 500 jobs, $30M in wages, additional dividends, and more!

The co-op estimated that their retail model would create 500 jobs and generate $30M in wages per year- that equals an industry average salary of $60,000 annually! The co-op has also said they’re willing to pay Alberta dividends on top of what they’d already be paying in taxes.

The Canadian Cannabis Co-op also says that by bringing licensed producers together, the smaller producers get more negotiating power when dealing with Alberta’s Gaming and Liquor Commission, the designated wholesale distributor of cannabis in the province.

According to the press release, members of the Canadian Cannabis Co-op include ABCann, Aphria, Bonify, CannTrust, Cronos Group, Emblem, Emerald, Hydropothecary, MedReleaf, Newstrike (Parent Company of Up Cannabis), Organigram, and Tilray.

What does this mean?

The cooperative includes huge licensed producers, such as Aphria, along with smaller LP’s like Newstrike, and their banding together is interesting because it shows that licensed producers are aware that their branding efforts aren’t resonating with the public.

Canadian cannabis (particularly BC Bud) is considered some of the best in the world, and just like the battle between “Big Beer” and Craft Brewers, consumers want the variety and quality that craft cannabis offers.

But it’s not just Canadians who want choice- this could impact the budding cannabis tourism industry as tourists definitely won’t be traveling all the way to Canada to try the “Budweisers of bud”.

Aurora Cannabis, the 800,000 sq. ft. elephant in the room

Aurora Cannabis is currently building the Aurora Sky project, an 800,000 sq. ft. cannabis production facility right by the Edmonton airport, so it’s interesting that Aurora Cannabis, one of Canada’s largest federally licensed producers, has not joined the co-op. 

Aurora Cannabis has said they are waiting hoping for more clarification on the retail model before they make a move, as they told the Calgary Herald, but they are considering getting into retail cannabis as well.

The CEO of Aurora Cannabis recently said, “We’re not interested in being a monopoly. Monopolies are good for nobody”, but you can rest assured the cannabis industry is watching Aurora Cannabis intently.

Take the survey!

The Alberta government is seeking feedback from the public in a survey, available here, which closes Oct. 27, 2017.

 

Sources:

Calgary Herald: Aurora Cannabis considers entering retail market amid uncertainty it will be allowed.

Calgary Herald: Dozen Cannabis Producers Seek Foothold in Alberta Retail.

Newswire: Canada’s Licensed Producers of Medical Cannabis form Retail Cooperative: Canadian Cannabis Co-op will provide investment, jobs, and safe, regulated cannabis to Alberta and beyond.