Pot retailers stuck with pricey leases as they await solutions to supply shortage
Cannabis entrepreneurs Wes Breault and Bill Evans will have to work harder than ever at their construction business this summer after the ongoing pot supply shortage has them stuck with a monthly lease of $3,000 and no indication of when they can open up shop.
“It’s been a pretty tough, long winter for us. We both have families and we’ve had to make financial sacrifices,†said Breault, whose shop “Green Easy†remains shuttered as they await approval from Alberta Gaming, Liquor and Cannabis, the provincial agency overseeing Alberta’s cannabis industry.
Last week, the AGLC said an improving supply of marijuana allowed them to begin issuing 26 more retail licences, a slight easing on a moratorium bringing the number of Alberta retailers to 101.
But the slight increase in cannabis availability is still not enough to completely lift the moratorium, leaving an estimated 600 prospective pot retailers stuck in limbo.
Some have been forced to cover expensive long-term leases, some locked in to five- and 10-year terms, while others are trying to at least sell pot paraphernalia as customers keep asking when cannabis will arrive.
“We’re taking anywhere from 50 inquiries, by phone, online and in person, people are looking for product but not able to get it,†said Lake City Cannabis owner Ryan Roch.
He and his wife are now selling accessories out of their Chestermere shop as they await approval for a business licence. But like Breault and Evans, they, too, are forced to pay a monthly $3,000 lease, and it’s been hard keeping afloat financially.
“We’re just a mom-and-pop operation. It’s a process, we understand. But it’s tough. It’s stressful.â€
Grant Kosowan, president of Orange Group Commercial Real Estate, who represents larger leaseholders like Starbucks, said it’s been incredibly tough financially for unapproved pot retailers, many of whom unwittingly signed ironclad deals with savvy landlords.
And because commercial leases are typically long-term, tying renters in for five to 10 years, Kosowan predicts financial losses could go on for quite some time.
“A lot of people just don’t do their due diligence,†said Kosowan, whose firm helps tenants negotiate leases with escape clauses.
“But with the frothiness of legalization, a lot of people really wanted to just get into their space . . . and now they’re going to be out a lot of money.â€
Breault hopes Canada’s cannabis industry can soon find the same success he saw during a recent visit to Colorado, where business is booming and pot retailers have created a supportive community.
“We visited so many locations and there was so much camaraderie.
“And bad neighbourhoods were turned into up-and-coming neighbourhoods. It’s doing wonders for the economy.â€
Breault himself has enjoyed the benefits of marijuana and says it continues to help him.
Despite nearly 20 years in construction, it was time spent at a desk working a mouse and keyboard that gave him such a debilitating shoulder injury that he couldn’t lift his arm over his head.
But thanks to medicinal marijuana, Breault can still work pain-free, and has since been inspired to open his own shop.
“It worked so well, and allowed me to keep working after I had no mobility,†Breault said.
AGLC officials told Postmedia this week they are no longer speaking with media on cannabis issues, but did confirm they are working with about 600 retailers who have applied for business licences.