Pubdate: Thu, 04 Jan 2018
Source: Calgary Herald (CN AB)
Copyright: 2018 Postmedia Network
Author: Bill Kaufmann
Page: A1


Marijuana dispensary firms' efforts to launch dozens of franchises and
shops in Calgary has ignited concerns of a chaotic scramble ahead of
the drug's recreational legalization.

Calgary-based Spiritleaf has attracted 40 entrepreneurs willing to put
up a $25,000 franchise fee to operate a cannabis retailing store under
the company's name, said CEO Darren Bondar.

"We're well-positioned to be ahead of the game and being an iconic
brand based in Alberta," said Bondar, who has exhibited at marijuana
industry expos in the city.

The prospective franchisees have been told the total startup costs
range from $300,000 to $450,000.

He said there's probably room for "a couple of hundred" recreational
cannabis shops in the city, given there's about 2,100 liquor stores
throughout the province.

According to the Alberta Gaming and Liquor Commission, there are 447
liquor stores in Calgary.

As Spiritleaf and other players sign up franchisees or scout out
possible locations in Calgary ahead of recreational marijuana
legalization expected next summer, city and provincial officials still
haven't ironed out exactly how the shops will be located or regulated.

The province has said private industry will operate brick-andmortar
shops, while the government will handle online marijuana sales.

One veteran retailer of medical cannabis who plans to enter the
province's recreational market said he's concerned about what he sees
as a reckless stampede into the new commercial era. Fred Pels of the
Green Room, which operates stores in B.C. and information centres in
Calgary, said he's concerned about franchisees being enticed
prematurely into a market only to be left high and dry once rules are
hammered out.

He said many of the sites identified by franchisers as viable to
franchisees likely won't be approved by the city.

And a flood of neophytes, he said, could also harm the entire

"This is something that takes expertise and diligence," said Pels,
adding acceptance of such a contentious, fledgling sector is fragile.

"I've been fighting for this industry for a decade and I don't want
any black marks on it - it's worrisome."

Pels said he knows of about 30 different would-be players jostling for
a piece of the Calgary green gold and figures there's realistically
room for about 100 shops in the city.

His own company, he said, hopes to open eight stores in Calgary, none
of them franchises.

"We don't want to be responsible if something doesn't work out for
them," said Pels.

Bondar said his firm is well aware of the risks involved in entering
such a new field, as are its franchisees.

"Our franchisees are going in with their eyes wide open, there's full
disclosure," he said, adding the company has been in regular
discussion with the city and province.

"We're taking the appropriate measures, not going into communities
that don't want them … everyone wants to be socially

He said the company's and franchisees' plans can be adapted to
whatever regulations the province and city ultimately craft.

A city official involved in the process wasn't available for comment

The gaming and liquor commission, which is expected to issue licences
for cannabis retailers, is still awaiting guidance from the province
as to the number of permits to be made available and distribution
timelines, said spokeswoman Heather Holmen.

But she said the marketplace will be a prime arbiter of retail

"We could give out 5,000 licences, but will there be 5,000 successful
businesses?" she said.
- ---
MAP posted-by: Matt