Alcanna Inc. (TSX:CLIQ) stock has surged 7.8% over the past week as of close on September 27. Shares are still down 1.7% in 2018 so far. The company most recently announced a third quarter cash dividend of $0.09 per common share representing a solid 3.7% dividend yield.
The income offered at Alcanna is attractive considering its recent performance, but today we will cover its cannabis retail ambitions in Ontario.
Alcanna is set to open 37 retail cannabis stores in Alberta, which is the maximum number permitted under new Alberta regulations for the first year. The company is reportedly in the process of securing several locations in Ontario ahead of its wholesale rollout – scheduled for April 2019.
Alcanna CEO James Burns anticipates the competition for retail locations in Ontario to be fierce. "The better the spot, the more competitive it is," he said in a recent interview.
The new law proposed by the Ontario PC government restricts cannabis producers and their affiliates to one retail store at one production site. Aurora Cannabis owns 25% of Alcanna, and it had originally planned to give retail locations its namesake ahead of legalization.
This new law has put doubt into that strategy. The purpose of the new legislation is ostensibly to encourage more competition and give smaller retailers a chance to establish a footprint.
Even so, Alcanna is an attractive target with legalization only weeks away. Its performance in Alberta will be a solid measuring stick for investors eager to see how Ontario rolls out its retail plan.
