More cannabis stores popping up in Manitoba, but market not saturated yet, retailers say

Dozens of cannabis stores are sprouting upin Manitoba, after the province opened the retail market last Juneto anyone who is interested.

Manitoba's cannabis regulator has approved 23 stores under its newopen marketlicensing system, with 33 more retailers waiting for approval.

That's a big spike from the33 storeslicensed betweenthe legalization of recreational cannabis in October 2018 and May 2020.

During that period, the province capped the number of licences it awarded for cannabis retail. As of June, it opened the market up.

"I think there's probably at least another six to 12 months of aggressive expansion for the market before we start to see an environment similar to Alberta," Delta 9 CEO John Arbuthnotsaid.

That province, which now has roughly 550 cannabis stores, "expanded incredibly quickly in the wake of legalization to a point where stores in that market are now actually starting to close."

Manitoba isn't approaching that level ofmarket saturation yet, Arbuthnotsaid. In the meantime, larger entities such asDelta 9, which runs six of Manitoba's 56 licensed cannabis stores, are now jostlingwith new entrepreneurs bullish on the industry.

Buddies running smallshop

Atomic Flower, a new retailer in Winnipeg's Old St. Vital area, made its first sales on Sunday.

"The first customer that none of us knew, we almost had a little dance after he left," co-owner Gabriel Fortin-Barbier said.

Atomic Flower, which has been in the making since 2017, was started bythree buddieswho knewabout cannabis, and are now co-owners in aburgeoning industry.

But they were initially left out firstin 2018, when the government settled on the initial four retailersallowed tohandle cannabis retail, and then in the province's second phase of cannabis retail, whererural communities were hand-picked and prospective retailers chosen by lottery.

"It's been a long time coming," said co-owner Joel Lafond, who said the team persevered to get the store's doors open.

The owners say they can set Atomic Flower apart from the competition.As a bilingualretailer, they greet every customer through the door in English and French. They're also stocking uponcraftbrandsnot found elsewhere.

The cannabis sector is the "modern-day gold rush," saysco-owner Peter Slupski, who first suggested the palsgointo business together.

"We're definitely thinking about expansion right away. I mean,there's nothing really stopping us from it."

Delta 9,a producer and retailer ofcannabis, is planning to open three more Winnipeg stores in the northern and western areas in the first quarter of 2021, adding to the four it already operates in the city.Arbuthnot is planning as many as seven new stores provincewide this year.

The company's analysissuggests Manitoba can accommodate90 to 120 cannabis stores.

"There are still some question marks as to the overall market size, but I would say there's still room for more retailers," Arbuthnot said.

Alberta, which implemented an open marketat the onsetof legalization,is an indication of where Manitoba's expansion market could go, he says.

"From there, in order for companies to really maintain profitability, often consolidation is key."

Latelast year, Alberta lifted the cap on the retail licences a single owner can holds. Manitoba limits owners to 15 per cent of the market, but Arbuthnot suggests that may eventually change to allow market forces to act.

For now, George Smitherman, president and CEO of the Cannabis Council of Canada, said Manitoba's gradual approach of relegating private ownership before opening the market is held in high regard nationwide.

"Ithink it's important to keep in mind that if we want to eliminate the illicit market, we have to provide clients with good, reasonable access, good quality and reasonable pricing," he said.

Outside Winnipeg,Opaskwayak Cree Nation has made a big impact in the cannabis sector, with itsmultimillion-dollar stake inNational Access Cannabis, one of Canada's largest cannabis retailers.

Some new players in the field are trying to reach Manitobanswherever they may be, whether that'sat the lake or getting groceries.

Candice Bellmoreand Michael Gibson were approached by a firm inCalgary, which participated in Manitoba's rural licencelottery, about operating a cannabis store in the eastern Manitoba town of Lac du Bonnet.They took up the offer and transformed theirtattoo and headshopinto Cottage Country Cannabis.

Bellmore expects business at theirstore to pick uponce moreseasonal cottagers arrive in the Lac du Bonnet area.

"I think we've been really, really well received in the community," shesaid."We haven't had any blowback."

In St. Jean Baptiste, a family that didn't even apply for a cannabis licence will be selling the product in the small community, 70 kilometres south of Winnipeg.

Jonathan Chun purchased the St. Jean Grocery, but it was theprevious owners, not him, who decided toapply for a cannabislicence,said Jay Chun, his son and a store employee.

"I never even tried" cannabis, Jaysaid, chuckling,"and then my parents never tried. When we tryto order things or when we try to do a report, we have to learn all those things.

"We didn't know [about the industry], but we are learning."

More cannabis stores popping up in Manitoba

4 years ago

Duration 2:07

Dozens of cannabis stores are sprouting up in Manitoba, after the province opened the retail market last June to anyone who is interested.