News

This is how Big Weed charmed Alberta’s liquor stores

Canopy Growth helped convince private liquor stores in Alberta to get on board with legal cannabis
October 18, 2017, 11:44am

Two years ago, Alberta’s association of liquor stores wasn’t keen on weed. Many board members had negative perceptions of the drug and never thought it would become one of Canada’s fastest growing industries.

So when Bruce Linton, CEO of Canadian medical licensed cannabis producer Canopy Growth, first met Ivonne Martinez, president of the Alberta Liquor Store Association, the reception was “tepid,” the businessman recalled in an interview.

“She was a little bit cautious on this ‘marijuana thing’ with this ‘marijuana guy,’” explained Linton, whose company is valued at over $2 billion and is poised to lead Canada’s future recreational weed market when it opens by next summer.

“And I said well … they’re going to lose a lot of their top line business to marijuana.”

“Bruce has been very helpful in trying to envision what cannabis sales can look like in Alberta and put people’s’ minds at ease”

That’s when Linton believes the relationship between legal weed and Alberta’s booze business began to shift. Martinez invited him to fly from Ontario to speak to her Association’s board a couple weeks later. He’s made four trips to Alberta since then related to the liquor file, which he believes holds the key to future recreational cannabis sales in the province.

Linton’s most recent trip was this week to give the keynote speech at the Alberta Liquor Industry Conference hosted by Martinez’s group in collaboration with the province’s Gaming and Liquor Commission. His talk was entitled: “Economic opportunities of cannabis and leveraging the Alberta liquor model.”

It’s moments like these that could help shape which cannabis players will come out on top, or get pushed out of, the future legal market in Canada projected to be worth billions. Intense lobbying efforts involving alcohol regulators, provincial officials and marijuana companies are underway in several provinces which have yet to announce their weed distribution plans.

“Bruce has been very helpful in trying to envision what cannabis sales can look like in Alberta and put people’s minds at ease,” Martinez told VICE News. She says she works on behalf of the province’s 1,400 or so private liquor stores, of which 600 are official members of her group.

While the exact details of Alberta’s plan to distribute non-medical cannabis by next year have yet to be decided, the province’s justice minister Kathleen Ganley unveiled a draft proposal earlier this month. It would set the minimum age to buy and consume cannabis at 18, the same as it is for alcohol there, and give the Alberta Gaming and Liquor Commission rights to oversee wholesaling and distribution. It’s still unclear whether storefronts will be government-run or private companies, or a combination of the two. Albertans still have until the end of October to provide input on the plan.

If Linton could predict the future, he envisions existing liquor stores in Alberta being retrofitted to sell pot. Even though the province’s proposed plan would prohibit cannabis and alcohol from being sold in the same place, there’s a way around that.

“Would I like to vertically integrate and control the point of sale? Yes”

“In one door, it will be a cannabis store. And in the other door, it will be a liquor store. And it will all be inside the same footprint, which has fairly advanced security control systems, so that the liquor currently doesn’t go missing at night,” said Linton.

Liquor stores could make “minor amendments” to their infrastructure in order to retail cannabis by next summer, he said. “That’s why I’ve been supportive of them.”

On the other hand, Linton has eschewed the cohort of 12 licensed weed producers formed this month to push for their own retail operations in Alberta. The Canadian Cannabis Co-op says it would create a “turn-key retail solution” for “socially-responsible cannabis retailing.”

“Would I like to vertically integrate and control the point of sale? Yes,” said Linton. “But if you’re entering a province that already has a distribution system that has caused people to invest a lot of money… I don’t think that rubs everybody quite the right way.”

Martinez says the province’s private liquor store model provides the ideal setup for cannabis sales, something Linton saw early on.

“What an opportunity to grow the business,” she said. “There’s a lot of money to be made for those who do business the right way … but at the end of the day, for us, it’s all about selling responsibly.”