Supply Chain Issues Causing Some Issues, Experts Say

Canada’s cannabis shortage could be over quicker than we thought, researcher says

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.

However, provinces such as PEI have not seen a cannabis shortage, and Alberta continues to open retail cannabis stores.

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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  1. Capn Dred

    There never was a shortage. It was manufactured. Made up rumours, not truth. Just like on opening day, when in my city of 1.5 million they allowed only two stores to open (There were actually 6, but the city announced to the media just the two to force the crowds there), just so they could make a scene and complain about the crowds and noise. Which happens EVERYTIME there are line ups around the block for anything not-weed-related too. They were just trying to make cannabis legalization look bad, and manufactured an excuse to tighten up the bylaws regarding cannabis and cannabis retailers.

    But there hasn’t been a shortage either. The governments are slowing things up to make it look like there is. Why? Doesn’t matter what games they play though. The black market had plenty to keep us going. And at a quarter the price too! The stores here charge 55 for an eighth of an ounce container! NOT INCLUDING THE TAXES. So that is 55×8=440 dollars, plus taxes, for an ounce! I can buy those for 150 a piece on the blackmarket. 220 is the highest BM price per ounce around here. Not $500! And the price per ounce gets even cheaper if you actually buy in bulk instead of just buying one at a time.

    7000 kg sold during one of the two busiest weed sale months in the year is pretty pathetic for Canada tbh. EVERYBODY wants weed at xmas and new years eve. That’s when the once-a-year-smokers all come out and start asking their friends, family and co-workers to pick up for them. So where were the increased sales in December? The BM always faces a supply crunch at the xmas holidays. How come retail didn’t? Are even the casual smokers who buy a bag only in December unwilling to pay the inflated prices and taxes at legal retail stores? Or are they the only ones that used retail last month?

    It is definitely not home growing that is putting such a dent in the legal sales and keeping them so low. Not many canadians, even those with prescriptions, are willing to try growing their own yet. Home growing sales are picking up but still extremely slow compared to what they should be– with a lack of legal places to buy seeds or clones from, q’uelle surprise. I personally AM suprised though. There are dozens of places in Canada already that have been selling seeds for decades, and still are, and hundreds more websites from other countries– but people are scared to use them and order seeds. The majority of Canadian tokers seem just fine with calling their old guy to buy cheaper, actually organic and safe, buds from the black market, but they are scared to order seeds off an illegal website and grow free weed for life. Go figure Canada.

    Is part of this shortage and supply chain woes diabacle to cover up the fact the LP’s in Canada are shipping so much bud to other countries? Are the Germans getting first pick of our buds, and THEN the Canadian retail system? Hmmmm.

  2. LPC News Editor Listing Owner

    I’ve heard so many different scenarios that it’s hard to say. I tend to believe though that the reasons behind the “shortage” (perceived or real) are pretty hum-drum reasons. Opening a multi-billion industry from scratch is bound to create issues, especially within an industry with so much oversight. Supply-chain challenges including missing or muddled Health Canada labels mentioned in the article can seriously affect the availability. So, the “shortage” may not be due to actual supply, but to getting that supply to consumers — and hitting a bunch of speedbumps along the way.

    You raise some great points though. I think the key thing is that the experience is different all over the country. PEI and Alberta seem to be keeping up with demand (if reports are to be believed), while Quebec is not.Ontario doesn’t even have brick-and-mortar stores. I imagine there are variances even within provinces. For long-time cannabis users, there will be even more adjustments to the new system.

    I’m not sure what the answer is, ultimately, though I imagine sometime soon the retail cannabis industry will even out.