CALGARY—Richard Harvey has been in the wine trade for a long time.

Since 1996, he’s owned a little wine shop in downtown Calgary called Metrovino Fine Wines, selling mainly European vintages. He has no plans to get into the cannabis trade when it becomes legal in Alberta in October. But he has some advice for prospective budtenders.

“If you have stars or dollar signs in your eyes, you haven’t really explored the situation,” he said. “It’s going to be fierce.”

Cannabis and alcohol are very different drugs. One is still illegal to use (nonmedicinally), the other hasn’t been since Prohibition. But Alberta’s decision to sell booze privately — and how liquor stores handled it — is surprisingly similar to how the cannabis business is shaping up today. September marks the 25th anniversary of the announcement of full alcohol privatization in Alberta. To this day, Alberta’s still the only province or territory in Canada to handle liquor sales this way.

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In just over two months, Wild Rose Country will follow suit for weed. And — as of next spring — so will Ontario. Cannabis producers and retailers across the country are flocking to the province after Ontario’s provincial government announced it would be changing tack from public to privately run stores.

Liquor store owners and retail experts told StarMetro Calgary how cannabis store owners can learn from Alberta’s foray into the private booze trade nearly 25 years ago — and what’s changed:

Proceed with caution

Since April, hundreds of applications for cannabis stores have landed on the desks of Calgary’s city planning staff. Entrepreneurs of all stripes — from one- or two-store owners to the CEOs of major companies — are surging into the province’s major cities and have plans to expand into smaller towns across Alberta. The same phenomenon happened in 1993 with fully privatized liquor stores. Fast-forward a couple of decades, and a significant number have gone out of business.

“If we go back to when liquor stores became retail-oriented in Alberta, and not all just government outlets, we had a ton of them open up,” said Lynne Ricker, a marketing professor at the University of Calgary’s Haskayne School of Business. “And then you had some fallout in the market. Not everybody is going to make it.”

Before the move to full privatization, about 200 government-run liquor stores existed in Alberta. Today, Alberta has around 1,500 private liquor stores, many owned by a single company — Alcanna. The liquor store chain claims to be the largest company of its kind in Canada.

The same is true in cannabis. While the province has set limits on the number of cannabis stores any one company can own, firms like 420 Premium Market, Calgary Co-op, and Alcanna (thanks to a partnership with Aurora Cannabis Inc.) are quickly moving into the Alberta market.

“It’s kind of the same in any retail business,” said Kyle Murray, vice-dean and professor of marketing at the University of Calgary. “You tend to have a few big winners. That’s what gives us the Walmarts and the Apples of the world.”

However, Harvey said failed liquor stores in Calgary tend to get replaced fairly quickly. When one closes or goes out of business, another tends to fill the void. He expects the same will happen in the cannabis trade.

“It seems like there’s no end to replacement,” he said.

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Sell trust

Say you run a liquor store ... how do you sell more Pinot Grigio than your competitor across the street, when you’re effectively selling the same bottle of wine? It all comes down to how you bring a customer in, entice them, make them feel as though you’re the most trusted wine seller they know. According to Harvey, the same will also apply to cannabis stores.

“Every one of them is going to have to find their niche and clientele, as we do,” he said.

This goes back to a basic point any retailer should know, Murray said.

“The product, obviously, is important, but in modern retail you can hardly ever compete on product. It really comes down to service,” he said. Of course, he added, catering to a certain crowd always helps, but the business is all about retaining a following — not only bringing customers back, but making yourself useful to them.

At Metrovino, Harvey said, they make a point of sourcing wines from small vineyards in France, Italy, and Spain — wares not typically carried by major liquor stores. And Harvey said his staff are also trained in how to pair specific wines to specific foods, something he said a cashier at a major chain might not know how to do.

“I would hope and expect these cannabis retailers would have that,” Harvey said.

But it’s still something of an unknown

Ultimately, there’s one major difference with selling cannabis recreationally in Alberta: nobody really knows how many people will line up at cannabis stores when they open. While Statistics Canada has estimates of the percentage of Canadians who’ve used cannabis within the past three months (about 14 per cent), it’s far more difficult to gauge the recreational retail market’s size.

“We knew exactly what liquor sales were like in the province before liquor was privatized,” Murray said. “We have only a vague notion of what cannabis sales are like.”

Cannabis is undoubtedly a popular drug in Canada, and cannabis businesses are anticipating they’ll make a profit, but it remains to be seen how exactly it’ll all play out on Oct. 17.

“I think if you’re growing your own cannabis retail biz — good luck to you,” Harvey said.

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