Supply Chain Issues Causing Some Issues, Experts Say
The so-called cannabis shortage may not be anything more than supply chain issues, recent figures suggest. December sales figures show that 7,252 kilograms of legal cannabis (dried) were sold along with 7,127 litres of cannabis oil. Those figures are for the recreational and medical markets combined.
Surprisingly, that was only a fraction of the total inventory of legal cannabis. Nationwide, there was 19,085 kg of dried cannabis, and 38,829 litres of cannabis oil available. In other words, there was almost three times the amount of dried cannabis available than sold, and more than five times the cannabis oil.
Yet there is obviously an issue, either real or perceived. Ontario decided to give out only 25 retail cannabis licences, citing cannabis shortages. Quebec has limited the number of days its provincially owned stores are open.
So what’s causing the so-called cannabis shortage?
“It’s puzzling to me,” said Rosalie Wyonch, an economist with C.D. Howe. “Something is causing a hold-up between cannabis supply being there and ready to be sold and it not getting to the consumer. That is a friction we really need to understand.”
Cannabis Shortage Caused by Many Factors
Cannabis shortage issues seem to be connected to the supply chain, not the actual supply. One issue was related to Canada Revenue Agency excise stamps. Many licensed producers stated just before cannabis legalization in Canada that they couldn’t finalize packaging. The packages required CRA labels, but with only one label supplier, the process was slow. Then, the stamps arrived without glue so each label had to be manually applied to the label.
Other factors are likely at play in the cannabis shortage as well. Health Canada forecasted that the country’s licensed producers would have to produce about 1 million kilograms of cannabis to meet demand. According to figures – thanks to Health Canada’s need for meticulous record keeping – we know that the demand is being met from a growth perspective. It’s unclear who is currently investigating the cannabis shortage in Canada, or what will be done about it.
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