Pot shop a no go

A Calgary woman who hoped to set up a cannabis shop in Black Diamond is crushed after seeing the government’s wholesale price. When Danielle French read the Alberta Gaming, Liquor and Cannabis (AGLC) is setting its average wholesale price for cannabis at $8.90 per gram while recommending it be sold at $10 or less to be competitive with the illicit market, she threw up her hands in surrender. “To me it seems like the governments are taking all the share,” said French, of Enlightened Herb Cannabis. “When we crunched the numbers we realized it’s not feasible in that profit margin. It would be negative $4,000 a month. We can’t operate on that. “I don’t know how they’re going to meet the mandate of eliminating the black market. To me it’s a government-level mess up.” Recreational use of cannabis became legal today across Canada. The AGLC’s breakdown of average wholesale price of cannabis by product format, provided by French, shows the product price as $6.40, federal excise duty as $1, the provincial duty as $1.08 and GST as 42 cents. The average wholesale price per gram is $8.35 for dried flower, $4.96 for milled flower, $9.11 for pre-roll, $10.97 for oil, $9.65 for capsule and $12.04 for seed, it states. “We can price things higher, then are we being competitive with the black market?” she said. “Would people come to us?” French, who grew up in Okotoks and uses cannabis medically, said when she contacted the Town of Black Diamond last spring about her plan to open a cannabis shop at 306 Government Road she was told the location wouldn’t meet the CPTED (Crime Prevention Through Environmental Design) requirements stated in the draft land-use bylaw. This was because her customers would have to park in the back, making the building ineligible, according to the draft bylaw. After French expressed her concerns at the July 4 council meeting, council amended it to read that cannabis stores “may incorporate crime prevention through environmental design principles.” French said it didn’t provide the assurance she needed. “How do we determine which principles they are going to impose and not,” she said. “There is no way for us to know.” French said she was willing to show the Town “that’s a ridiculous statement and we would have enough security measures in place,” until she received the information from the AGLC. “Once we realize the pricing wasn’t going to work we didn’t look any further,” she said. Combined with the added costs cannabis stores will face from security and safety to equipment costs, French said it would be impossible to make a profit. “There is a several hundred dollars per month just to track the product and report the inventory to the AGLC,” she said. “Meeting all those requirements is above and beyond what the average retail store would pay.” French said Enlightened Herb Cannabis is considering other options like carrying higher-end, specialized and craft products. “We have ideas of other ways to get into the industry – maybe an industrial hemp farm, maybe edibles in a year,” she said. “There are ways we could maybe be a part of it but the retail end of it is not going to work out. We will follow along and see how this is going to pan out and figure out if there’s another way we can support the industry and keep our business involved.” Calgary is even an option. “Maybe if we specialized in a craft product and become more a boutique that may be a niche in the market,” she said. The AGLC’s wholesale pricing strategy states it will set the retail price for what consumers buy online at alberartcannabis.org, where retailers can choose from over 300 products. The online store will be in direct competition with private retail stores, it states. According to chief administrative officer Sharlene Brown, the Town has received no applications for cannabis-related businesses.