Pot Retailers Stuck With Pricey Leases as They Await Solutions to Supply Shortage

Article by Eva Ferguson, Calgary Herald

Pot retailers stuck with pricey leases as they await solutions to supply shortage EVA FERGUSON Bill Evans (L) and Wes Breault stand in the work in progress retail store in Strathmore, east of Calgary on Wednesday, April 24, 2019. Breault and his partner pay $3,000 a month to lease their pot retail outlet, although they have not yet been approved to sell due to the supply shortage. Jim Wells/Postmedia

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.”

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.

Read the full article here.

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