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Aug 17, 2018

Aphria exploring Ontario cannabis retail plans: CEO

Aphria CEO gives mixed review to delay in Ontario's brick-and-mortar cannabis stores


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Aphria Inc. CEO Vic Neufeld said the cannabis producer will look to open its own retail stores in Ontario once the province gives companies the green light for private marijuana sales to take place next year.

Neufeld told BNN Bloomberg in an interview Friday that the company held back on pursuing a retail strategy in western Canada but after it became clear that Ontario would allow privately-run own stores, it makes sense for Aphria to open its own shops.

“In Ontario, our backyard, 50 per cent of our potential population of revenues comes from the province we live in,” Neufeld said. “We’ve now added this [retail] option to our strategic plan.”

Aphria’s (APH.TO) involvement would likely create a crowded cannabis field in Canada’s most populous province. After Premier Doug Ford announced the province would scrap his predecessor’s plans to open provincially-run cannabis stores, other major pot producers such as Canopy Growth Corp., Aurora Cannabis Inc. and Cronos Group have all stated plans to set up their own Ontario-based stores. The buzz behind cannabis is also pushing established retailers into the space, including Second Cup Coffee Co. which said it may convert some of its Ontario coffee outlets to cannabis retail stores.

Aphria has been “engaged in several dialogues” with potential firms that could assist with its retail strategy, but the company has yet to strike a deal, Neufeld said.

“It doesn’t mean ownership or an acquisition necessarily, it just means putting the right team together,” he said

Neufeld noted that online sales – which is how Ontario plans to sell cannabis once it becomes legal recreationally in October – is unlikely to move the needle for licensed producers such as Aphria. As well, selling cannabis online for the first six months of legalization will not dent the underground market that most Canadians currently source their marijuana from, he said.

“The bulk of the underground consumers today are going to stick with their supply chain,” Neufeld said. “The dispensaries, the Joe on the street corner, will continue to survive.

“There will be an element of commerce. I don’t think any licensed producer is jumping for joy right now but it’s only six months. We know Premier Ford and he will … get it done.”