Guy Quenneville | CBC News | October 3, 2019
Some independent retail cannabis store players are banding together to combat what they see as the growing encroachment of big business in Saskatchewan’s legal pot industry.
Nearly a year after the first of the province’s retail cannabis stores opened, at least 25 out of 36 operating stores — more than two-thirds — are owned by a publicly traded company or chain.
In Saskatoon and Regina, five out of 11 operating stores are either owned by Canopy Growth Corporation or Westleaf Cannabis, the parent companies of Tweed and Prairie Records, respectively. Another publicly traded company, Fire and Flower, owns six stores elsewhere in the province.
Then there are one-off stores like Jim Southam’s Prairie Cannabis in Prince Albert where, according to Southam, good supply and fair prices for wholesale pot have been hard to come by.
Southam said it’s challenging for small, individual stores to compete with larger interests that can secure supply contracts at much higher volumes. He said he’s sometimes had to settle for subpar weed just to put something on his shelves.
“It is a David versus Goliath situation,” Southam said.
Seeking better prices
Southam has partnered with Clayton Sparks — who won a chance at operating the legal pot store in La Loche — and Landyn Uhersky, the owner of Regina’s Wiid Boutique Inc., to launch the Weed Pool Cannabis Co-operative.
“We hope that we can achieve better pricing buying as a group and better product selection from other suppliers in the country,” Sparks said.
The Weed Pool is hoping its us-versus-them credo breeds customer loyalty.
The co-op, which is in talks with five other potential members, is borrowing its name and logo from the historic Saskatchewan Wheat Pool. That coalition of organizing farms formed in 1923 out of frustrated attempts to get a fair price for their grain.
“We feel like consumers are going to be drawn to our stores because, simply, we are private. I think they’re going to want to support that as opposed to running down and supporting Tweed stock price,” Sparks said.
Not a unique approach
Jason Childs, an associate professor of economics at the University of Regina, said the plan might just work.
“If you think of your stereotypical cannabis consumer, they’re not terribly fond of either big government or big business,” Childs said. “So this kind of hail-to-the-small-guy marketing pitch might play very well with this audience.”
But this is not a revolutionary business model, he added.
“These kinds of buyer groups have existed in a lot of other industries” — even small, independent one-hour photo and camera supply shops have done it, Childs said.
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But pooling together could also help the co-op gain more pull with provincial regulators, whose laws tend to have a bigger financial effect on smaller operations, Childs said.
Even Adam Coates applauds what the Weed Pool is doing. Coates is the chief financial officer of Westleaf, a publicly traded company with three stores in Saskatoon, one in Calgary and more on the way in Alberta and B.C.
“They’re trying to push the envelope in terms of getting [a] better environment for their business,” Coates said of the Weed Pool.
“Hopefully they can get better pricing so it’s cheaper to buy products or they get more selection because one of the [areas] Saskatchewan sometimes gets left behind is in how the [licensed producers] allocate their inventory to Saskatchewan. You might not always get the same amount of choice in terms of strains as Ontario or Alberta because Saskatchewan is a smaller province.”
In the same way that Hollywood film studios once owned their own national theatre chains — until a 1948 antitrust case put an end to that — larger companies like Canopy Growth Corp. have both cannabis growing operations and retail stores.
Canopy launched its seven-million-square-foot cultivation field in an unspecified area of northern Saskatchewan last June, while Westleaf is currently building its own production facility in Battleford.
Sparks said the co-op hopes to grow large enough to become a producer, too.