Cannabis Retail Chains Ready for Banner Year
“I’m Really Glad 2019 is Over” Says High Tide CEO – LPC
Cannabis retail chains see fewer obstacles ahead for 2020 and expect a larger roll-out of stores. Several larger ones sat on a panel hosted by AltaCorp Capital in Toronto last week. The event was part of ATB Financial capital market division’s annual investor conference.
“I’m really glad 2019 is over,” said High Tide CEO Raj Grover during the panel. (Please see link to full article below.) “We learned a lot of valuable lessons.”
Meta Growth CEO Mark Goliger joked that he learned to assume that “government is not going to get it right.” That was mostly a shot at Ontario’s cannabis lottery system. The province announced in December though that the Ontario retail cannabis market was finally opening up, which added to the optimism in the room.
Financing was top of mind for Fire & Flower CEO Trevor Fencott. He said the high-flying stocks of 2018 returned to earth in 2019, making financing difficult for everyone including cannabis retail chains.
“There was a lot of access to growth capital, and all of a sudden it completely dried up,” Fencott said. “I think the biggest lesson that we can take from 2019 is to focus a lot more on profitability.”
The three cannabis retail chains together oversee over 100 stores across the country; all three plan to grow their storefronts.
Ontario is Key for Cannabis Retail Chains – LPC
Ontario, by far the most populous province in Canada, is key for cannabis retail chains. At last count, the province had only 27 cannabis stores for a population of over 14 million. Meanwhile, Alberta’s cannabis retailers number around 300 for a third of the population. Ontario’s Ford government has been blamed for disappointing retail sales. Companies such as Canopy Growth and Aurora Cannabis called Ontario out directly as a factor in their weak year-end numbers.
Now that Ontario seems to be truly “open for business” in the cannabis market, cannabis retail chains are ready to pounce. Analyst Justin Keywood from Stifel said he expects Fire & Flower’s sales to almost triple in 2020.
“We expected a move to a more privatized model in Ontario, and see Fire & Flower as being a large beneficiary with already 13 strategic lease locations in high traffic areas (mainly in Toronto) ready to go,” Stifel said. Fire & Flower expects to have 131 locations in place in 2021.
Similarly, Meta Growth plans to open 90 locations by the end of 2020, more than doubling their current number of stores.
With the strength of Cannabis 2.0 products, anything is possible in the Canada’s cannabis market. But it seems there’s a lot to be optimistic about for cannabis retail chains in 2020.
This editorial content from the LPC News Team provides analysis, insight, and perspective on current news articles. To read the source article this commentary is based upon, please click on the link below.
