We have been receiving a wave of phone calls from potential tenants looking to cash in on the upcoming legalized marijuana trade.
They are fervently shopping for locations, a practice which I feel might be premature.
Is the province really prepared for this?
I’m not sure any part of Canada is.
The national legislation has not been passed, but pot shops are already popping up everywhere.
No one’s saying it, but I can only presume the proximity in time to legalization is what is stopping police from taking action.
As a commercial real estate agent, I’ve been cautious and have advised landlords to do the same. Contracting leases with tenants who don’t have existing licences — and with no guarantee they’ll get one — is risky.
A lease is a legal contract between two parties; there are clauses to protect against “what-ifs” and “maybes”, but they are not typically set up to be broken.
It will be hard for tenants who are already set up in spaces to close up shop if they’ve been denied permits. This scenario could put tenants in a hard spot and landlords in an even tougher position.
Stiff competition for cannabis permits
The province received a total of 1,502 applications for licences across Saskatchewan. There are only 51 permits available.
Even if your application makes it through the vetting process, a lottery ultimately will decide the winners.
Saskatoon will be potentially awarded seven retailer permits, while Regina will receive only six permits.
In my little hometown of 2,500 people, there were 21 applicants for one permit. I’m not certain Unity can even justify one, but prove me wrong!
StatsCan is also reporting that Saskatchewan has the lowest rate of marijuana use of the provinces. It also noted the price of weed has fallen in recent years as well.
None of this bodes well for a robust retail outlook.
Pot and a pint?
It was announced this week the Leo’s Group of restaurants is among the applicants for permits to sell cannabis. Leo’s brand includes the popular Leopold’s Tavern and Victoria’s Tavern concepts in Saskatoon and Regina.
Logically, it appears they would need separate retail locations from their existing bars.
It’s not a stretch, however, to think a bar operator might be the most prepared to follow Saskatchewan Liquor and Gaming Authority protocol when it comes to cannabis retail.
The whole process is further complicated by the fact that if pot permits are anything like liquor permits, SLGA will require a location in place before it can provide approval.
And that presents a unique dilemma: what comes first, the chicken or the egg?