High Tide Inc. is set to buy two cannabis stores in Saskatchewan, making it the latest publically traded retailer to expand its foothold through acquisitions, but several independent store owners in Alberta have shrugged off larger companies’ offers despite lower-than-expected revenue due to the national supply shortage. These so-called independents said they are in it for the long haul.
“We’re fighters, we’re going to stay in it. We have a couple people who have talked to us about purchasing our company. We’re not interesting in selling,” said Chris Felgate, co-owner of Small Town Buds in Devon, Alta.
The national supply shortage, however, means that Small Town Buds frequently runs out of supplies and, aside from the first week in January, has only had enough cannabis on its shelves to open its doors for around four days a week since legalization in October.
“Bigger stores can afford to bleed,” Mr. Felgate said, adding that some weeks the store goes “into the red.”
“That first week in January was one of our best weeks but the last three weeks have been the worst so far. We only got 10 per cent of what we tried to order.”
Just this week, privately owned Puff Puff Pass Headshop in Newfoundland closed due to supply issues, making it that province’s first private weed store casualty.
Meanwhile, Calgary-based High Tide, which owns Canna Cabana stores in Alberta, has signed letters of intent to buy two cannabis retail locations in Saskatchewan from separate vendors. The stores will be Canna Cabana stores, and the purchase will enable the company to sell online to Saskatchewan residents, something that is not permitted for private companies in most provinces.
The purchases come after National Access Cannabis Corp., Canada’s biggest recreational pot retail company in terms of outlet numbers, bought an independently owned store in Saskatchewan and some NewLeaf outlets in Alberta.
Still, Mr. Felgate sees room for independent stores to grow due to strong demand for cannabis and expectations for abundant supplies in the future. They just need to get through this rough patch.
“We haven’t let anybody go yet. We try to give them as many hours as we can and we’ve even paid them for (some) days they haven’t worked,” he said.
Daniel Nguyen, chief executive of Numo Cannabis in Edmonton, said he is also playing the long game.
“I’m not trying to sell my business but there has been interest. Supply is not going to be like this forever,” Mr. Nguyen said.
“We try to stay open just to have good customer service. Last weekend I had no product.”
Bud Runners Cannabis, a family-owned business with two Alberta locations and a total of nine employees, is also in it for the long haul.
“We’re just getting started. If you look at Colorado, it took them five years to get caught up with demand,” said Nick McGahey, co-owner of Bud Runners Cannabis.
Written by: Marcy Nicholson
Source: The Globe and Mail