Located just outside the Edmonton International Airport sits a sprawling compound that looks from the air like a giant football field made of plate glass. This is the home of Aurora Cannabis; when marijuana is legalized in July, this warehouse may become one of the largest hubs for the distribution of recreational pot in the country.
Canada’s position at the global forefront of the legalization process is setting Canadian companies up for international success if all goes well; and Alberta’s decision to keep distribution as private as possible – mirroring the relatively free market we enjoy for liquor sales – puts Alberta right in the heart of what could be an enormous boon.
For early adopters in a nascent industry, Alberta has a lot to recommend. Even though our tax advantage has eroded, we still boast the lowest business taxes in the country. There’s comparatively little red tape, and we have some of the lowest electricity rates – crucial for greenhouse operators.
While other provinces and municipalities dither on marijuana, the business communities in Calgary and Edmonton have gone all in on the “cannabiz,” actively seeking potential investment and business opportunities.
For example, in Edmonton, NorthCanvas, which describes itself as a “business accelerator” dedicated to this sector, claims to be the first of its kind in the country. It has hopes to provide seed capital of between $3 and $5 million to as many as 30 startups in coming years.
Aurora is one of the most aggressively expanding companies in the country, hoping to take advantage of a marijuana industry that has been valued by Deloitte at almost $23 billion in Canada (includes the value of the drug itself) as well as related services like security, tourism, transportation, and taxes.
Aurora is setting itself up to be one of the largest players in this emerging market; its growing behemoth at the airport, it hopes, will give it access to the burgeoning demand for same-day and overnight pot delivery. Aurora’s ambitions don’t stop with is strategic airport position, Aurora may also capitalize on emerging markets in Germany and Australia.
The legalization process has been a bit of a patchwork across Canada, with each province setting out its own rules for legal age, permitted possession, and distribution.
In Alberta, the NDP government has announced it would allow private storefronts and government-run online sales. This is a stark contrast to Ontario’s approach, which will fall in line with that province’s much more restrictive liquor distribution.
Some statistics suggest there could be a huge demand in this province alone. Of the 200,000 licensed medical marijuana consumers in Canada, 40 per cent hail from Alberta, although we’re home to only a fraction of the medical marijuana suppliers.
Of course, with all opportunity should come caution.
Some warn that the legal marijuana market may already be wildly overvalued. It remains to be seen whether there will be enough supply to meet demand. And while it would be reasonable to expect an initial uptick in interest when it legalized, most studies show that weed is not a mainstream pastime for the vast majority of Canadian adults.
Legalization may change that, but it may not.
What is known is that there is no shortage of investors, both large and small, eager to enter this market, either at the retail or wholesale level. It will be exciting to watch this multi-billion industry take shape from the ground up.
