Canada facing nationwide cannabis shortage ahead of legalization

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Canada’s legal recreational cannabis market may not have the supply it needs to meet sales in its first year. Recreational cannabis is set to be legal in less than two weeks, but as the October 17 date approaches, industry experts are predicting that the current supply is unlikely to meet the high demand expected for the next year.

“There is not currently enough legal supply of marijuana to actually supply all the recreational demand in Canada,” economist Rosalie Wyonch of the C.D. Howe Institute told the CBC. “We didn’t have enough producers far enough ahead from legalization that they’ll actually be able to deliver enough product to market by the time legalization happens.”

A recent Statistics Canada survey found that roughly 4.6 million Canadians, 16 percent of the population, used some form of cannabis in the second quarter of 2018. That number could potentially be higher since the survey asked respondents to admit to illegal activity.

Health Canada estimates that the annual demand is 926,000 kilograms, or roughly 2 million pounds of dried cannabis, according to the CBC. There’s currently no reliable data that estimates the exact supply of recreational vendors, but a recent estimate states that the country’s supply of medical cannabis is at 66,404 kilograms of dried product.

The B.C. Liquor Distribution Branch (BCLDB), British Columbia’s provincial retailer and distributor, planned to have more than 150 strains of cannabis, but due to supply issues, will likely only have half of those options available in its online shop and their one retail outlet in Kamloops.

“The volume of product will be considerably lower than what licensed producers (LPs) originally committed to providing,” the B.C. Liquor Distributions Branch (BCLDB) told the Globe and Mail this week in an email. “B.C. isn’t alone in this situation; shortages are expected to impact all jurisdictions across Canada, as some LPs look to opportunities in overseas markets.”

Nova Scotia also says they expect to have less inventory and variety of product in their 12 retail locations because of product shortages and Quebec is experiencing a similar situation.

“There’s a lot of demand and not a lot of offerings, so we’re monitoring the situation closely,” said SAQ spokesperson Mathieu Gaudreault.

Other provinces are more optimistic with their supply. A spokesperson for The Alberta Gaming, Liquor and Cannabis Commission said the province does “not foresee any issues with our supply levels for retailers and the online platform.”

Ontario is also not as concerned as only their online platform will be available with no retail locations open until spring of 2019.

Experts say that there are a number of issues that are contributing to supply issues across the country. The BCLDB has been told that crop yields have been low and that some producers are still waiting for Health Canada to give them their license. Other producers are still only partially licensed so are unable to grow to their full capacity.

The BCLDB is having to reach out to other LPs to try and alleviate the supply issues, but because the issue is seen nationwide, supply is very limited.

“We’re being asked to supplement our orders. It’s bad news out there,” Eric Paul, chair of CannTrust Holdings Inc., told the Globe and Mail last week. He added that CannTrust has entirely committed its available product and also that a lot of logistical problems are only making matters worse.

“Part of the problem is getting those little excise stamps. We’re short of stickers and we can’t shop without them,” Paul said. “That slows the industry down,” he added. “Everybody’s behind the eight ball.”

The BCLDB said that it’s currently unknown how long it will take to resolve these issues.

Original Article by 420 Intel

Victor MadrilComment