Some neighbourhood liquor stores across Alberta will be converted into cannabis dispensaries when one of the country's largest medical marijuana producers buys a stake in the business.

"We're looking to convert a number of the existing liquor stores in the West to cannabis-only stores," said Cam Battley, chief corporate officer for Aurora Cannabis.

"There won't be a co-location of cannabis and alcohol. In fact, we're going to have stand alone cannabis stores."

On Monday, Edmonton-based Aurora announced it will acquire a minority share of Liquor Stores N.A, an Alberta-based chain that operates 231 retail liquor stores across North America, with dozens of outlets in Alberta and B.C.

The capital from the $103.5-million deal will be used to refurbish existing liquor stores to meet the demands of a new consumer — the legal cannabis buyer.

'We're looking into our crystal ball'

"They will look different," Battley said of the soon-to-be retrofitted storefronts. "The products are quite different, so we have to take into account the tastes and the preferences of cannabis consumers of the future.

"We're looking into our crystal ball and trying to figure out what the right layout and the right design of the store will be."

Liquor Stores N.A, a publicly listed company, has 178 locations in Alberta, 34 in British Columbia, and a presence in Alaska, Connecticut, New Jersey and Kentucky.

In Alberta, the company operates primarily under the brand names Liquor Depot and Wine and Beyond.

'We're going to be ready'

The chain has a vast retail footprint in Alberta, one of the few provinces that will allow private retailers to sell recreational cannabis when it is legalized in Canada this summer.

Aurora is building a 800,000-square-foot medical marijuana facility south of Edmonton. As part of its retail operation, the company will focus on training liquor store staff in different cannabis products and strains soon to be made available on the legal market.

Liquor Stores N.A will focus on day-to-day operations of the new cannabis outlets, he said.

As legalization looms, the partnership is a huge growth opportunity for both businesses, said Battley.

"This is something that we've been looking at for some time," said Battley, who noted that the deal had been in negotiations for several weeks. "They understand the retail space, and that's what we were looking for.

"What you see here is two strong Alberta companies coming together to build what the future will look like."

The companies have not said exactly how many stores will be retrofitted and have not clarified their timeline for construction.

Battley said he expects there will be legal hurdles as the companies navigate through new federal regulations, laws and bylaws.

"We're going to be ready for day one of commercial legalization," he said. "We want to make sure that there will be no wait time and we will be able to enter that market immediately."