An industry group representing Canada’s biggest cannabis producers says the shortage of marijuana that plagued businesses in the early months of legalization is over.
“There is ample supply of cannabis for the adult recreational market,” Cannabis Council of Canada said in an open letter to Ontario Premier Doug Ford, who cited the shortfall when capping the number of stores the province would allow to open.
“There simply is no longer a shortage,” the group’s letter stated.
The Cannabis Council represents 35 federally licensed cultivators, who account for about 90% of the production of Canada’s legal cannabis industry.
New data from country’s federal regulator back up the group’s claim.
“Finished” inventory of dried cannabis had tripled to 60,872 kilograms as of August from 18,418 kilograms in October 2018, according to Health Canada.
At the same time, the volume of dried cannabis sold was 12,917 kilograms in August – just 21% of the inventory held by cultivators, processors, distributors and retailers.
A shortage of dried cannabis defined the early months of Canada’s legal cannabis industry, stymieing growth and frustrating wholesalers and retailers.
Some provinces, like Ontario, cited the shortage as a reason to limit retail expansion. (Ontario only 24 marijuana stores open, while Alberta has licensed more than 300.)
Dried cannabis proved to be more popular than oil in the first year of Canada’s legal recreational market.
About half of the 11,705 liters of cannabis oil sold in August was for the medical market.
Whereas the medical market accounted for 9% of the 12,917 kilograms of dried cannabis sales that month.
Finished inventory of cannabis oil more than tripled in the past year to more than 100,000 liters as of August.
As inventory improved across Canada and more stores opened, sales rose sharply.
Retail-level sales of adult-use cannabis were 54 million Canadian dollars ($41 million) in November 2018 – the first full month of legalization – rising to CA$127 million in August.
Edibles, extracts and topical cannabis products are going to slowly be introduced into the market starting in mid-December.
Written by Matt Lamers
Marijuana Business Daily