On October 7, 2018, weed became legal across Canada. Not only did this monumental achievement provide consumers with an easier, safer pathway to purchasing and enjoying product, it also provided weed manufacturers, distributors, and retailers with an opportunity to seemingly do better business.
Unfortunately, the abundance of consumer enthusiasm has helped lead to some very real supply and demand issues in the Canadian marijuana market.
During an interview with CTV News, George Robinson, CEO of cannabis company RavenQuest, said it may take five years before supply catches up with demand. He added: “We’re absolutely not getting anywhere close to the (needed) supply.”
Proving this point in some manner is Thomas Clarke, the owner of a private cannabis shop in Portugal Cove, N.L. Clarke told CTV News that he recently ran out of product for two weeks, before receiving a $15,000 shipment that might last his store just a couple of days.
More alarmingly, Clarke noted how amused black market dealers are by his struggles.
“They say ‘Ha ha, you don’t got any cannabis in your store, you’re only making seven-and-a-half per cent (profit) … our business on the black market is thriving and we’re making 100 per cent’.”
Understanding Robinson’s belief and Clarke’s reality is Terry Booth, CEO of the Edmonton-based Aurora Cannabis Inc. This week during a conference call to discuss his company’s Q2 financials, Booth admitted that he “loses sleep” over his industry’s ability to supply the global cannabis market.
In Canada, provinces – a number of which control the sale and distribution of cannabis in their regions – have blamed a lack of supply on not receiving enough quality product from licensed producers. On the other side of the ledger, licensed producers have complained that Health Canada’s licensing process for producers doesn’t move fast enough. Thus, a bottleneck effect comes into play.
“We need better retail infrastructure across the country to see the level of sale everyone is anticipating,” offered Aurora’s Chief Corporate Officer Cam Battley in the aforementioned conference call. “It will take a couple more quarters.”