‘It’s all sort of spoken for’: Sask. cannabis retailers grapple with supply shortages

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‘It’s all sort of spoken for’: Sask. cannabis retailers grapple with supply shortages
WATCH ABOVE As recently as the start of this week, some new cannabis retailers didn't have assurance on how big their opening supplies would. – Oct 17, 2018

Recreational cannabis is now legal, but that doesn’t mean it will be easy to come by. Only a handful of retailers are open in Saskatchewan, none of them in Regina or Saskatoon.

Living Skies Cannabis owner Cierra Sieben-Chuback is ready to open her store once she can stock it.

“I have some supply, but I don’t really know where the next supply is coming from and I don’t want to open my doors until I know that,” Sieben-Chubakc said.

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The Saskatoon-based entrepreneur hopes to open her store by the end of the month or first week of November at the latest. She can’t set a firm date because there are too many things up in the air.

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“There simply really isn’t a lot of supply. So the people that do have supply right now in the country, it’s all sort of spoken for across the entire country,” she said.

“I think that might be due to the fact that places beside Saskatchewan, they have to go through their version of the [Saskatchewan Liquor and Gaming Authority] to get their product whereas we’re free to reach out directly to the [licensed producers] (LPs). So those LPs that do have product, I think would rather sell a huge lump sum at one time then deal with 51 individual retailers.”

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Sieben-Chuback added that she feels LPs are more in favour of dealing with independent retailers that have multiple locations during these initial days.

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Living Skies Cannabis is not alone in this issue. The Daily Jaw reports that New Leaf Emporium in Moose Jaw will have to delay their opening due to supply issues as well. When Global News spoke to the proprietor last week, he anticipated an Oct. 17 opening.

In Yorkton, Fire and Flower, who operate stores in Alberta and Saskatchewan, said they would run out of supply shortly.

“Over the next weeks to come, I’m sure we’ll face some of the challenges associated with getting product in, but this is a temporary situation,” Fire and Flower Executive Vice President of Finance for Fire and Flower Cannabis Co. said.

Just outside Saskatoon in Martensville, Sask., John Thomas and his brother David are preparing to open one of four Jimmy’s Cannabis Shop locations. The duo received shipping confirmation Monday, which will also allow them to open their Battlefords, Sask. store.

Thomas added they will also be offering only sales across Saskatchewan for legalization day.

“We think it’ll be interesting. We’re a little unsure of what the demand will be. I think there’s a limit of how many websites will be up to process transactions. So we don’t know what the demand will be, but we will be open and give it our best shot,” Thomas said.

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The Estevan Jimmy’s is expected to open later this month, and the Moosomin, Sask. should open later this year.

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Even with demand questions, Jimmy’s anticipates good business, especially with no stores open in Saskatchewan’s biggest cities.

“With supply where it is we do anticipate large demands because those are two quite major cities that don’t have stores open and we do expect some of those people will look online,” Thomas said.

With the current supply issues Thomas anticipates the opening price for dried cannabis will be $10 to $15 per gram, depending on the strain. Both he and Sieben-Chuback anticipate the price will drop once supply demands are better met.

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“I mean, it’s just kind of basic economics. The demand is really, really high right now and the supply is really, really low,” she said.

Delay for some, opportunity for others

Just outside of Regina, in the RM of Sherwood, work is underway on OneLeaf Cannabis Corp’s 48,200 square foot growing facility.

The future LP is not operations yet, but CEO Trevor Green anticipates having everything up and running by the end of the year. OneLeaf’s first commercial crop is expected to be ready in early March.

“The supply shortage for us is an opportunity to become part of the market while people are still selecting products and the brands they want to support,” Green said.

OneLeaf will specialize in growing “craft cannabis”. Green said OneLeaf will focus on producing higher end and unique strains not offered by larger LPs.

“People in Saskatchewan like to buy locally, there are not a lot of producers in Saskatchewan so again, it’s a great opportunity for us,” Green said.

“We’ve had a lot of conversations with retail owners and we’ll be on their shelves for sure once we’re up and running.”

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In a September interview, SLGA Minister Gene Makowsky said Saskatchewan has eight licensed producers, with around 10 more going through the approval process. Seven cannabis wholesalers are also going through the permitting process.

Green anticipates supply issues could last for upwards of two to three years in the current climate.

Don’t use the black market

The SLGA is well aware of the supply challenges facing retailers. The Crown corporation sent an email to the 51 permit holders on Oct. 12, encouraging permit holders to only buy from LPs.

“In these circumstances, it is possible that some retailers may be tempted to look for alternate supply from illegal sources, including designated growers under the medical marijuana system,” SLGA cannabis licensing and inspections branch director Joanne Gasper said in the email.

“Because cannabis coming from illegal sources is not regulated for safety, SLGA will immediately suspend the permit of any retailer that is found to have unauthorized product in the permitted premises.  We also consider this type of violation grounds for permanent cancellation of the  permit.”

Gasper encourages permit holders to remain patient while any “bumps in the supply chain” are worked out.

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