Expect cannabis shortages to continue across the country

Oct 19 2018, 10:50 pm

It happened!

You can officially buy non-medical weed legally in Canada.

Newfoundland kicked off the buying frenzy at 12:01 am on October 17, with other provinces following suit shortly thereafter.

As expected, retailers sold out of various items within hours, adding to the concern about cannabis shortages.

“It was announced prior to October 17, 2018 that [we were] expecting to receive lower than anticipated volumes of product from Licensed Producers (LP),” a rep from the BC Liquor Distribution Branch told Daily Hive via email.

The LDB runs the online and brick-and-mortar BC Cannabis Stores. Currently, the province has only one store open, located in Kamloops.

Earlier this week, Minister of Public Safety and Solicitor General Mike Farnworth confirmed that 1000 sales were made online in the first hour that the government site was live.

As of this morning, the BC Cannabis Store had received 13,064 orders since the stroke of legalization, from both the Kamloops location and online purchases.

“Most shortages are being seen in the dried flower one-gram quantity as well as oil capsules. However, we continue to offer product in other quantities in order to satisfy customer demand,” said the rep. “BC is not alone in this situation, shortages are expected to impact all jurisdictions across Canada, as some licensed producers look for opportunities to market overseas.”

The rep listed several other reasons as to why LPs may have been delayed in fulfilling their supply agreements. These included:

  • Insufficient supply of packaging materials (including excise stamps) and processing delays due to manual packaging and labeling processes
  • LPs are still awaiting their appropriate Health Canada sales license
  • LPs experiencing issues with their supply chain and distribution of products
  • Lower than expected crop yields
  • Higher than expected levels of inventory sold to other channels including the medical market and other LPS

“We have significantly large players see significant delays in terms of their expansion so they’re not in a position to supply what they thought they would be able to supply 6 months or 12 months ago when they were entering into these agreements,” Greg Engel, CEO Organigram, a New Brunswick-based LP told Daily Hive over the phone.

Organigram has also experienced difficulty meeting their orginal supply agreements, although Engle said they have fulfilled a significant portion of those contracts.

“There’s been a culmination of a number of things that are related to production not being built out or up and fully functional at the time they expected,” Engle said.

“There are also issues with packaging, issues with excise stamps, issues related to getting testing completed as the test facilities have had dramatically increased demand upon themselves.”

Engle said that that automation and packaging lines don’t function at 100% on day one and that “it takes time to get them up and running.”

Engle predicts that “we’ll see some of those near-term issues be resolved but in the future, we know that production levels that have been forecast will not keep up with demand.”

“One of the things people don’t talk a lot about is that in 12 months we’ll be launching vaporizable products and edible products and beverages,” said Engle, noting that some plants will be diverted to creating those products, putting further strain on supply and demand.

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Jessica BrownJessica Brown

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