As the Canadian market gets closer to the legalization of recreational cannabis, producers in the space are locking down bets on the retail models available across the country.

On Wednesday (August 8), Aurora Cannabis (TSX:ACB) announced a new licensing agreement with Alcanna (TSX:CLIQ), an alcohol retail company previously known as Liquor Stores.


Alcanna expects to open 37 new cannabis stores in Alberta following the legalization of recreational use on October 17. These stores will be branded under the Aurora name and will carry specialists on hand for consumers to navigate the selection of product.

 

Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 

According to the companies, Alcanna is transforming existing liquor stores into the new cannabis shops. “Launching this retail network under the Aurora name will capitalize on its reputation as a leader in producing high-quality cannabis products, created with the consumer in mind,” Alcanna CEO James Burns said in a press release.

Alberta has confirmed it plans to allow private retail shops to operate in the province alongside government-owned shops.

According to the province, the private shops must pay a C$400 non-refundable application fee per store, a C$700 annual license fee and a C$3,000 initial deposit for mandatory background checks. Alberta will also mandate that the shops open only after 10:00 a.m. and close at 2:00 a.m. at the latest.

Questions have been raised in the industry regarding the restrictions producers should face when it comes to owning the same shops where product will be sold. Aurora has indicated these new stores will carry product from MedReleaf and CanniMed, its two major billion-dollar acquisitions.

In July, the cannabis producer signed an agreement for 25,000 kilograms of adult-use cannabis with Alberta for the first six months of sales in the province. Since the province is then tasked with distributing that product in its own stores and to private retailers, Alcanna will effectively be buying the product from its partner back from the province.

“Which might sound redundant, but it is reflective of our private retail model in Alberta … they can’t provide directly from the producer to the retail store, even though they are one and the same,” Heather Holmen, spokesperson for Alberta Gaming, Liquor and Cannabis (AGLC), told INN.

According to Holmen, the Aurora/Alcanna partnership, as a retailer, will be allowed to select only Aurora-related cannabis product from the province’s supply if it chooses to do so.

 

Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 

However, Aurora can’t purchase all of the cannabis it sells to the province due to AGLC restrictions. “Any [licensed producers] that become affiliated or have stores that want to carry their products exclusively they can, but they can’t be in the position that they are going to purchase all the product outright”

Existing relationship between Aurora and alcohol retailer

In February, Aurora confirmed an investment in Alcanna, then still known as Liquor Stores, for aggregate gross proceeds of C$103.5 million in exchange for a 19.9-percent stake in the company.

At the time, Terry Booth, CEO of Aurora, called the partner for the cannabis producer one of “Alberta’s most recognizable retail brands.”

Burns indicated on Wednesday that the new store network will begin in Alberta and then move on to other provinces as it is allowed. A similar strategy has been used by other retail operators seeking to set up shop in the soon-to-be-legal Canadian market.

Investor takeaway

Canaccord Genuity analyst Matt Bottomley issued a research note on Aurora following the MedReleaf acquisition. In his note, the analyst stamped the company with a price target of C$11 and reiterated his “buy” recommendation on the stock.

Aurora’s share price spiked early during Wednesday’s trading session, reaching a day high price of C$6.40. However, the cannabis producer decreased as the day continued and closed at C$6.18, representing a marginal 0.32-percent increase to its share price.

Alcanna enjoyed a more stable jump, rising 3.27 percent to reach a price point of C$9.48.

Don’t forget to follow us @INN_Cannabis for real-time news updates! 

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

 

Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 

Trulieve Cannabis Corp. (“Trulieve” or the “Company”) (CSE: TRUL) (OTCQX: TCNNF), a leading and top-performing cannabis company in the United States today announced the appointment of Marcum LLP (“Marcum”) as its independent registered public accounting firm, effective July 5, 2021 . Marcum was appointed following the resignation of MNP LLP (“MNP”) as the Company’s independent registered public accounting firm effective July 5, 2021 .

“We would like to thank MNP for their guidance and expertise over the past two years and we look forward to working with Marcum as the Company’s new independent registered public accounting firm,” stated Chief Financial Officer, Alex D’Amico.

Keep reading... Show less

Cannabis-infused beverages are not a new product concept, but this summer Canadian drink makers hope consumers will discover them for the first time.

Recreational cannabis beverages have beguiled Canadian producers through different avenues, and many continue to make investments. The promise of these drinks lies in the potential of a more welcoming option for new consumers who may be out of their depth with rolled-up dried flower.

Keep reading... Show less

In the news release, BioHarvest Sciences Inc.‘s First Cannabis Cell Reservoir Produces Ongoing Flowering Stage Cannabinoid Cells For 2 Years, issued 07-Jul-2021 by BioHarvest Sciences Inc. over PR Newswire, we are advised by the company that an incorrect version of the release was issued inadvertently. The complete, corrected release follows:

BioHarvest Sciences Inc.‘s First Cannabis Cell Reservoir Produces Ongoing Flowering Stage Cannabinoid Cells For 2 Years

Keep reading... Show less

Trulieve is the first medical cannabis operator to start planting in the state

Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) (“Trulieve” or “the Company”), a leading and top-performing cannabis company based in the United States announced today that it commenced operations in West Virginia . The Company has begun cultivation at their 100,000 square foot size facility in Huntington, West Virginia .

Keep reading... Show less

– The Company demonstrates the efficiency and reliability of its BioFarming technology by reducing production cycle time for Cannabis from 14-23 weeks to 3-4 weeks.

– The Company’s BioFarming technology will allow the Company to harvest 13-17 cycles per year versus 2-4 cycles per year for conventional Cannabis agriculture.

Keep reading... Show less