Alberta Gaming Liquor Cannabis has pledged to issue five new cannabis retail licenses per week going forward after ending the moratorium on applications.

A dearth of supply across Canada caused AGLC to halt new license applications in November 2018. It had ordered enough marijuana to supply 250 retail stores for the first months post-legalization, but it only received a fifth of that.

It decided to impose a hiatus on new retail applications as it could not guarantee supply, but six months later it has finally been able to lift the moratorium. It now has contracts with 26 licensed producers across Canada and it believes an increase in production will allow it to meet increasing demand in Alberta.

AGLC said it will continue speaking to all licensed producers across the country in a bid to secure enough marijuana to maintain a steady rate of new store openings.

There are now 106 licenses in the state after it issued five more this week. The plan is to release five per week now on an ongoing basis, which should see a far bigger cannabis industry take shape in Alberta, Canada’s fourth largest province by population and third by GDP.

The proportion of people using cannabis in Alberta now stands at 21.5%, the highest prevalence rate in the country, according to the latest quarterly cannabis report from government agency Statistics Canada. It increased from 16.5% in the first quarter of 2018.

Earlier this month, the Société québécoise du cannabis announced that dispensaries will now be open seven days a week. It was forced to close the 13 stores on Mondays and Wednesdays due to a chronic lack of supply in the province, but it now feels confident that it is in a better place to fulfil demand.

Many Canadians are still turning to the black market to source cannabis as it is cheaper and not beset by the same supply concerns. Statistics Canada reported in April that Alberta is the most expensive province in the country for buying cannabis via legal means, at $12.03 per gram. The average on the black market is $9.76.

In Quebec, a gram costs $8.25 legally, or $6.52 on the black market, while for the whole of Canada it works out at $10.91 legally and $7.63 illegally. Yet the agency said the gap is closing, and teething problems in the supply chain are being overcome, so the black market may not be quite so vibrant in future.

Fire & Flower Holdings Corp. (TSXV: FAF) has six fully built locations on AGLC’s current license queue. It hopes to open these stores soon and then it will continue to build out additional stores, which it expects to open in the third and fourth quarters of 2019.

“Fire & Flower applauds the AGLC and the Government of Alberta for their leadership of Alberta’s growing adult-use cannabis industry,” said chief executive Trevor Fencott. “The AGLC’s work in securing reliable and diverse product supply reinforces Alberta’s forward-looking environment for retail adult-use cannabis.”

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