Are Fears of Cannabis Supply Shortages in Canada Justified?

Are Fears Of Cannabis Supply Shortages In Canada Justified?

Are Fears Of Cannabis Supply Shortages In Canada Justified?

October 17, 2018, the long-awaited day that cannabis goes legal across Canada has arrived and the world will never be the same. With all due respect to the great progress made by Uruguay, who helped pave the way for Canada, it can be argued that Canada, by permitting regulated sales to tourists is the first nation to truly legalize cannabis.

The cannabis industry has been one of the most exciting markets to watch and take part in over the course of the past few years, but new updates to legislation and the changing public paradigm of the industry have all contributed to an even more exciting market of the future. Thank you to Canada for taking a brave step into the unknown to pave the way for the rest of the world!

Article by Javier Hasse

17th October, 2018

On Wednesday , Canada became the first G7 nation and second country in the entire world (after Uruguay) to legalize adult-use cannabis. As the hands of the clock superimposed at midnight, the first retailers opened their doors in the provinces of Newfoundland and Labrador, allowing long lines of customers in to pick up some good green.

While great news for recreational weed users, legalization might be problematic for patients: many fear the country’s supply will not be enough to cover the explosion in demand — with e-commerce software provider Shopify reporting more than 100 transactions per minute. After all, the Canadian Imperial Bank of Commerce estimates that by 2020, the Great White North will be consuming about 810,000 kilograms (about 1.8 million pounds) of weed per year.

Interested in getting some expert opinions on the matter, MERRY JANE reached out to a few industry insiders and asked if the shortage concerns were justified.

It’s All In The Quality

Vinay Tolia, CEO of publicly-traded Canadian producer Flowr Corp. noted the fears are “absolutely justified on day one. Meeting health and safety standards on a large scale is not an easy task, and it’s apparent that there are big differences between what some LPs state as their capacity and what they can actually produce.” [Editor’s Note: Hyperlink added by MERRY JANE, not Tolia]

There are many other unknowns in the market, he added, arguing that the situation will be “dynamic” for some time, as suppliers figure out exactly what the consumers want and in what supply. It’s most likely we’ll see a steady offer of mass-market, low-priced cannabis, as there are a lot of LPs that can fill demand there; but premium quality, Snoop Dogg-approval-worthy weed will be a different issue.

1539807537560_iStock-492359316.jpg - Are Fears Of Cannabis Supply Shortages In Canada Justified?

The Early Days

Jessica Billingsley, CEO of seed-to-sale technology provider MJ Freeway seemed to disagree with Tolia, telling MERRY JANE that supply shortage fears are overblown “unless there is a tremendous amount of export pressure.”

“The Canadian cultivation operations have been built for scale,” she said. “Even if there is a temporary period of supply shortage at the start — two to three months, once the cultivation operations are fully online, there will be a glut that will even out and supply will meet demand.”

Down a similar lane, Kris Krane, president of cannabis investment firm and multi-state operator 4Front, said that while the size of the demand in the early days remains unknown, “it is reasonable to assume some supply issues in the early days as companies ramp up production” — as we’ve already seen in many U.S. states.

Also in agreement, Beth Stavola, COO and President of U.S. Operations of MPX Bioceutical, argued that we will need some time “to get production to where it fulfills the demands of the marketplace,” as Canada begins to issue new licenses and regulations. “Depending on how long this takes, there may be a temporary shortfall in supply, but hopefully it won’t be as dire as some suggest. If the government moves quickly to get licenses in place and expand the range of products available, they will have a thriving market in the near future.”

Finally, we reached out to equity analyst Alan Brochstein, best known as the 420 Investor, who’s been anticipating supply shortages for a while now. “It looks like there won’t be nearly enough product or SKUs of product on day one,” he stated. “With that said, the number of physical stores open on 10/17 truly rounds to zero in the scheme of things, and I expect online [sales] will be slow to take off as a channel — but will build over time.”

“It’s important to not judge the success on day one,” he continued, explaining we need to understand the launch will be “underwhelming but then moving in a positive direction over time, with more supply and points of distribution, as well as a better products set a year from now.”

1539807582966_iStock-515320992.jpg - Are Fears Of Cannabis Supply Shortages In Canada Justified?

Jodie’s Take 

Unlike the previous experts quoted, Jodie Emery, famed activist and owner of the hemp-themed café Jodie’s Joint, assured MERRY JANE that supply is definitely enough. The problem, in her view, lies in the new regulations and what the government allows to be sold.

“Canada has enough cannabis supply to meet demand,” she told MERRY JANE, arguing that Canadians have been growing enough weed to supply everyone for decades. The problem is that “the federal government isn’t legalizing that supply, though.” She added, “This is ill-deemed ‘illicit cannabis,’ just as it was ‘illegal cannabis’ before today.”

Emery also noted that “the costs and barriers to getting licensed as a federal legal grower are too prohibitive and prevent the existing suppliers from being able to transition into legality. Legalization should mean the legalization of the industry that grew despite prohibition, not the exclusion of those pioneers and prohibition victims.”

Follow Javier Hasse on Twitter 

 

More News from Canada….

Canada becomes second country to legalise recreational marijuana [BBC]

The first recreational cannabis to be legally bought in Canada was purchased at midnight on Wednesday on the eastern island of Newfoundland amid queues of hundreds of people. Canada has become the second country after Uruguay to legalise possession and use of recreational cannabis. Medical marijuana has been legal in the country since 2001.

Anthems of Canada [Altered Lyric Experience by Colonel Kurtz]

Are Fears Of Cannabis Supply Shortages In Canada Justified?

O Cannabis!
Our healing and nourishing plant!
True planetary love in all of us command.

With glowing hearts we see thee rise,
The Truth of Nature, strong and free!

From far and wide,
O Cannabis, we stand on guard for thee.

God keep its legislation gloriously free!
O Cannabis, we stand on guard for thee.

O Cannabis, we stand on guard for thee.

Dazed and confused: Canada cannabis legalization brings complex new laws [The Guardian]

Recreational marijuana will be legal throughout the country, but rules will vary from province to province.

Canada legalizes marijuana: here’s everything you need to know [The Guardian]

Can I grow my own?: Federal guidelines allow recreational users to grow up to four plants per household, up to a metre tall. Most provinces have acceded to this suggestion, with some (like British Columbia) stipulating that the plants must be grown in a secure location out of public view. In Manitoba and Quebec, however, home growing is illegal. Landlords in some provinces are also pushing for the right to ban tenants from growing cannabis in their rental properties. Also: do not move your plants while they’re budding or flowering! Appearing in a public space with a blooming cannabis plant nets you a fine up to $5,000, or five years behind bars.

Canada’s legalization of cannabis ‘contravenes’ international convention [UN News]

The legalization of cannabis in Canada for recreational-use, contravenes the key International Drug Control Convention, and is “not a healthy” lifestyle choice. That’s according to Viroj Sumyai, head of the independent UN-backed International Narcotics Control Board (INCB), in an interview with UN News.

As cannabis is legalized, let’s remember amnesty [The Conversation]

Before we celebrate, let’s take a moment to remember the Black and Indigenous peoples who have been overrepresented in Canada’s cannabis-related arrests, despite similar rates of cannabis use across racial groups.

Young drivers who use cannabis at higher risk of collisions for at least 5 hours, McGill finds [CBC]

Peer-reviewed study finds ‘significant impairment’ on complex, driving-related tasks.

Trudeau says Quebec cannabis plan leaves opening for organized crime [Yahoo!]

Prime Minister Justin Trudeau suggested Saturday morning the incoming Quebec government’s plan to raise the legal age for smoking cannabis to 21 could leave an opening for organized crime.

NHL stays with status quo as Canada pot legalization looms [Yahoo!]

Canada on Wednesday will become the largest country in the world to legalize recreational marijuana. That means it will be available under the law in seven more NHL cities (it’s been legal to adults in Denver since 2012). The move is a step forward for those who believe marijuana has been stigmatized and should be accepted as a form of treatment.

Here’s What Happens to the Black Market Now That Weed Is Legal [Vice]

We spoke to dealers, cannabis farmers and edible bakers about their plans post-legalization.

Campfires and cannabis: Parks Canada says it’s OK to smoke pot at campsites [CBC]

For the purposes of marijuana consumption, Parks treats campsites as temporary private homes.
Are Fears Of Cannabis Supply Shortages In Canada Justified?

 

Are Fears Of Cannabis Supply Shortages In Canada Justified?
Are Fears Of Cannabis Supply Shortages In Canada Justified?
Are Fears Of Cannabis Supply Shortages In Canada Justified?
Are Fears Of Cannabis Supply Shortages In Canada Justified?

Are Fears Of Cannabis Supply Shortages In Canada Justified?

Are Fears Of Cannabis Supply Shortages In Canada Justified?

Author: admin

Share This Post On

Submit a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Recommended CBD
Show Buttons
Hide Buttons
Visit Us On FacebookVisit Us On TwitterVisit Us On Google PlusVisit Us On PinterestVisit Us On YoutubeVisit Us On LinkedinCheck Our Feed