City bureaucrats are calling for a cap on the number of legal weed shops along Stephen Avenue, but an industry group is pushing back, calling the proposal "a little heavy handed" and arguing the market should decide store locations.

City staff say there should be no more than five cannabis stores along the downtown pedestrian mall between Macleod Trail S.E. and 9th Street S.W. Three have already been approved, though none have opened yet as the province grapples with a national shortage of cannabis.

The Calgary Downtown Association is throwing its support behind the proposal, aimed at avoiding clusters of pot shops along one of the city's most iconic urban streetscapes.

A city council committee is slated to debate the measure on Monday.

"We're on a mission right now to try and rejuvenate downtown, and that requires a mix of dining and shopping experiences," said Marco De Iaco, the downtown group's executive director.

There's a push to "rebuild the brand of downtown Calgary and make it more enticing to visitors, to Calgarians and to investors," De Iaco said.

But some pedestrians heading down Stephen Avenue one recent afternoon said city hall shouldn't set limits on the number of cannabis retailers along the strip.

The free-market forces will usually tell you what is too much and what is too little. - Lindsay Blackett, Canadian Cannabis Chamber of Commerce

Some said there should be as many stores as the market can handle.

"I feel like there's already such diversity on Stephen Avenue that if you were to throw even 10 shops on this stretch between Macleod and 9th, it wouldn't affect the diversity of the industry," said John Germain.

"I feel like it would just make it more crowded and lively on this street which is always good for the economy."

While city rules prevent clusters of legal weed shops in the rest of Calgary, the same rules don't apply downtown.

City hall staff say in a new report, to be presented to the council committee, they're not worried about possible clusters in most areas of downtown, given that it's normal for the commercial district to have large numbers of similar businesses.

But the bureaucrats say "a proliferation of cannabis stores" on Stephen Avenue "may reduce the diversity and mix of other retail, food and entertainment uses needed to develop a high-quality retail environment."

City staff propose a 300-metre separation between cannabis stores along the pedestrian mall, a rule that's consistent with what's already in place in other regions of the city. The rule doesn't apply to shopping centres, such as Bankers Hall and the Core, which are free to set their own limits.

The problem is the proposed rule has already been broken. The city has approved two cannabis stores within 300 metres of each other on the strip — 420 Premium Market's shop a few doors down from the Bank and Baron Pub, and Westleaf Cannabis' Prairie Records store set for the Palace Theatre.

According to city hall, the proposed 300-metre setback for Stephen Avenue will not affect these two shops.

The city has also approved a third pot shop down the street, a Modern Leaf location, at the corner of 7th Street S.W.

City staff say there is room for two more stores along the strip, under the proposed cap.

'Knee-jerk' proposal

But according to one business group, the measure is another unwelcome obstacle for the industry.

"It's kind of knee-jerk, which a lot of regulation and legislation has been on this issue," said Lindsay Blackett, of the Calgary-based Canadian Cannabis Chamber of Commerce. "The free-market forces will usually tell you what is too much and what is too little.

"They're being a little heavy handed, but they were when they decided there was no smoking that would be allowed in any public spaces in Calgary."

Despite municipal approvals for three Stephen Avenue pot shops, they likely won't open in the near future.

They still need the green light from Alberta Gaming, Liquor and Cannabis, which says it isn't issuing any new retail licenses "until further notice" because of the shortage of legal weed. The provincial wholesaler says it will ration existing stockpiles of cannabis to retailers that are already open.