Canada Cannabis Shortage: Retailers Facing Shortage Since Legalization

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Barely a month after the legalization of recreational cannabis, a Canada Cannabis Shortage has quickly developed. Cannabis Retailers eagerly wait for continued and hurdle-free supply.


 

With legalization of marijuana on the final talks, James Burns was assured that his company, Alcanna, would meet the demands of the consumers with his five new stores stocked up with cannabis products. Though he had received only half of the orders from the provincial supplier, he was confident that it would sustain. Now, a Canada Cannabis Shortage has changed all of that. He has his staffs checking the government supply website at early hours for an update on stocks that he can readily acquire and is also in serious consideration to restrict store hours.

Burns, who is the CEO of the company that owns a steady chain of private liquor stores in the US and Canada, and now cannabis stores in Alberta, states that with no stocks available, there isn’t much he can do. Read more about this Marijuana News below.

 

Non-availability of Cannabis a widespread problem

Newfoundland’s Thomas Clarke who was one of the first retailers to sell the drug legally in Canada states that he was sold out in a day and had to wait nearly a week for resupply. Though he has been able to sustain his store, he’s finding it hard to acquire all the products that he requires but was only offered a certain number of products to keep the store running.

In Ontario, an online retail store had its products sold out quickly, only to wait a long time for resupply.

Similarly provincially run Société québécoise du cannabis stores in Quebec, had to restrict their working hours by opening only on Thursday to Sunday owing to supply issues. In other cases, companies had to close down on stores due to lack of supply like New Brunswick, which had to briefly close 12 of its 20 stores owing to lack of supply.

The shortage of cannabis products hasn’t been a complete surprise. In accordance to a report released in October by CD Howe Institute, a Toronto-based economic think tank, it informed that the current supply could only meet up 30-60 percent of the total demands in the coming months.

The people in the industry, however, differ, stating that the shortage is worse than expected.  Burns exclaims that even when such a scenario was predicted, the unfolding of the events has been quite quick and clear-cut.

Health Canada which has been providing licenses to cannabis producers says they have been working hard for months much before the legalization in order to increase suppliers across the country and urge for patience among retailers.

In a statement released, the department stated, “It is important to note that October 17 marked the end of nearly a century of criminal prohibition of cannabis and the launch of an entirely new regulated industry in our country.”

Like in cases of new ventures that can have quite the demand but not enough supply chain, the steady demand of cannabis products has ended up running out inventories causing low to almost no supply of the products.

 

Poor management and lack of foresight are to be blamed

One of the main concerns regarding the shortage of cannabis products is the alarming factor that consumers may head toward the black market to buy them.

Going by the occurrence in the US; the federal government of Canada stated that displacing illegal marijuana supply to legal supply will take some time.

Another concern is the shortage of medical cannabis, which had been legal in Canada since 2001. Health Canada is now coordinating with both the industry and patient groups to clarify on the scarcity of certain products or strains.

It has requested licensed sellers to take necessary steps to meet the demands of registered patients to ensure them a continued supply of the products, required for medical purpose.

In accordance to a poll conducted by Angus Reid Institute, a non-profit research foundation, one in eight Canadians have been taking cannabis products since legalization. Coupled with the fact that now even coffee shops also sell cannabis extracts, there has been a heavy demand for cannabis products in the country.

Health Canada states that around 32,000 lbs (14,500 kg) of dried cannabis and 81 gallons (370 liters) of cannabis oil had been shipped to the country and producers have a reported account of 90,000 kg of the dried cannabis and 41,000 liters of oil.

The CEO of Aphria, one of the biggest licensed producers of Canada, Vic Neufeld stated that there have been a few hiccups in reaching the product to the country, especially at the gate.

“It’s like a five-lane highway all merging into one lane, a lot of issues when you try to push so much through the system in a very short period of time,” he said.

He also brought to notice the delays caused in getting excise tax stamps along with eleventh-hour changes in labeling requirements. Lastly, he also conceded that the demand for the product outnumbered its supply.

But Vic Neufeld is hopeful that the issues surrounding legal cannabis will be solved by the dawn of 2019. The company is banking on Health Canada for approvals that would allow for a more efficient, hurdle-free and agile supply chain.

Similarly, Burns concludes the even though the current status may not be ideal for retailers and consumers, he believes it to be a temporary hardship that will be resolved in the coming days and is optimistic about the company’s venture in the medical marijuana market.

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