A Calgary based company has dropped its plans to establish a retail cannabis store in Altona. Westleaf was going to set up a cannabis shop in Altona's downtown commercial district, but a company spokesman says they've decided against the move.

Adam Coates, the company's chief commercial officer, said challenges connected to the pricing of legal cannabis were part of the reason behind their decision to discontinue their plans to sell legal marijuana in Altona.

Companies selling legal marijuana are struggling to stay competitive with the black market when it comes to pricing. Statistics Canada reports the average price of legal cannabis increased to $10.30 per gram between October and December 2019 compared to the average price for illegal cannabis which fell to $5.73 per gram in that same period.

"This was a business decision...deciding on what makes the most sense for us and our overall strategy in the context of our greater business" said Coates. "We're not just a retailer, but we also have cultivation and extraction facilities that we are either operating or building out. When we looked at the strategy around what we're going to be doing with our retail business, we just had to make some of those tough business decisions."

Despite some of those challenges, Westleaf still intends to open retail cannabis outlets in Calgary and Edmonton in spring, which will give them a total of six stores located in Alberta and Saskatchewan.

According to Coates, Westleaf's decision not to do business in Altona had nothing to do with a local citizen group's efforts to prohibit the sale of legal cannabis in town through a petition. That petition has the potential to initiate a plebiscite on the issue if the group spearheading it can collect the signatures of 620 local voters.

"I was aware of it, but I can tell you that we had a ton of support locally for our store concept in emails, notes on social media and from the mayor and his team there. They were really supportive and focused on making sure that it was done the right way, with the right organization and with a level of professionalism."

Mayor Al Friesen said it's disappointing Westleaf felt it couldn't make a solid business case for coming to Altona.

"In this particular instance I guess dollars spoke louder...which did not support a retail expansion into Altona or into Manitoba for that matter. I think for those who were opposed, nothing has changed. The black market will continue to supply and Canada Post will be used to continue distributing product to consumers of all ages. For those who overwhelmingly told us that they were looking forward to a local, safe, regulated and legal option, our council will continue to stress that Altona is a business friendly, pro job community that has an overriding concern for the safety of all citizens."

Following the legalization of marijuana in October 2018, Altona was one of seven locations selected by the Manitoba government as part of an effort to open up the retail cannabis market in rural communities. The purpose behind the move was to bring recreational cannabis sales to areas that were not served by the initial distribution roll-out.

Westleaf was the province's first choice to establish a cannabis store in Altona. A second company, a numbered Manitoba corporation, was selected as the stand-by in the event Westleaf decided to pass on the opportunity.

Friesen says it's likely the province will communicate with the owners of the second company to determine its interest in establishing a retail cannabis venture in the town.

"Altona is still on the Manitoba government's list of approved communities which means the second business would still have an opportunity to locate here. It's not our story to tell, but I suspect Manitoba Liquor and Lotteries will be in touch with them."