ReLeaf NT, based in Yellowknife, now has the NWT’s only cannabis sales website after the GNWT closed its own website and backed out of the market.
Luke Wood, owner of ReLeaf NT, told Cabin Radio why he believes ReLeaf’s website can succeed where the GNWT’s did not.
He said product availability is one area where the GNWT’s website lacked, making it difficult to compete against the illegal market, which he calls the “big competition.”
“I think they had six, seven items in the end, when I had looked on their website, for sale. You need a big selection if you’re going to compete,” Wood told Cabin Radio.
Beyond the products they carry, Wood said shipping and payment options are also important considerations.
“If we have a store here with a huge selection and you can ship directly, next day out of Yellowknife, it goes to communities way quicker. It’s cheaper, of course, because of shipping,” he said.
“And I think [the GNWT’s website] was only taking credit cards. At our location, it’s 80-percent debit. So a large chunk of our customers don’t use credit cards. So that might have been a deterrent as well.”
Below, read a full transcript of the interview.
This interview was conducted on October 20, 2021. The transcript has been lightly edited for clarity.
Ollie Williams: It must be quite an exciting time for you.
Luke Wood: It is. We were looking at this for a while. They put out an expression of interest to see if anyone had any ideas. They weren’t getting a lot of action on their site. So they put out an expression of interest just to see if anyone had ideas, I think, and would be interested in taking it over. So we had submitted one, there’s a list of others as well. And what they’ve done is, they’ve made it so that if you’re designated a retailer, you can go online. So anyone can, we just were the ones that did. But Trailblazer could as well, and any other private stores as they open can go online.
What is it that attracted you to doing this? The GNWT’s website didn’t perform particularly well. What made you look at this and think you could move into this space?
The big competition, of course, is the illegal market. If you’re going up against the illegal market, what determines [success] is product availability, selection, price, and quality. So the GNWT website just didn’t really have … the product available. I think they had six, seven items in the end. You need a big selection if you’re going to compete. And also, they were doing a lot of drop shipments out of wherever it was coming from. So sometimes the shipping would be as high as $50.
If we have a store here with a huge selection, and you can ship directly – next day out of Yellowknife – it goes to communities way quicker. It’s cheaper, of course, because of shipping. And I think [the GNWT’s website] was only taking credit cards. At our location, it’s 80-percent debit. So a large chunk of our customers don’t use credit cards. So that might have been a deterrent as well.
You mentioned the quality of the product. You still have to go through the NWT Liquor and Cannabis Commission to acquire stock. What makes you convinced you’re going to be able to deliver products that make a difference?
When this all started, they were learning as well. They’ve actually gotten quite good at it and they have partnerships now with way more [suppliers] than at the start. At the start, when we were looking at this, it was Canopy Growth, which is like Tweed product, and Aurora Cannabis. Now I barely have any Tweed product in the store or Aurora. There’s so much more. And it’s because of all these partnerships that the commission has been forming.
So it’s gotten so much better. It’s like anything, it just takes time for people to figure out. I mean, I’m learning too, it’s a new industry.
As far as the quality, you have a lot of money being poured into this industry. It’s like alcohol, you know, nobody’s buying off bootleggers any more. It’s that kind of thing, so as long as the quality goes up – which it is – and the price is definitely dropping. Every month, everything is cheaper. I think when we started, the cheapest we sold ounces for [was] $107 and some. Now I’ve sold ounces for $105, and we haven’t been open a year yet.
What does this mean for your business? If this takes off, will you have to expand quickly?
Well, not really. If you look at the entire NWT – what’s the population, around 40,000? It’s a small, small market, overall. And there are stores in these other locations. So you’re basically serving smaller communities that don’t have a store [and] will go online and buy off of you. And then how many people in those communities actually use or consume cannabis? So it’s not a huge chunk. But it definitely is an expansion on the business. We just have to kind-of find efficiencies and get good at what we’re doing.