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Canadian Cannabis Shortages Spark Post-Legalization Reckoning

Canadian Cannabis Shortages Spark Post-Legalization Reckoning
Photo Gracie Malley for Cannabis Now

Economics

Canadian Cannabis Shortages Spark Post-Legalization Reckoning

Nationwide cannabis shortages since Canada went legal last month are causing some provinces to rethink their distribution plans.

Canada’s licensed cannabis suppliers have been struggling to keep enough product in stock in the weeks since legalization hit in on Oct. 17. Now, Alberta’s provincial government has decreed that retailers will no longer be able to order cannabis online in an effort to control supply.

On Nov. 12, the Alberta Gaming, Liquor and Cannabis Authority (AGLC) informed all retailers in the province that they will have to manually order their next shipment. When cannabis went legal on Oct. 17, licensed retailers could place orders with the AGLC online — on a first-come, first-serve basis. But this contributed to what Canada’s Global News wryly called a “chronic shortage” in the province. Of course, it is worth noting the cannabis shortage is only for legal cannabis and the illicit market is still thriving in Canada.

Joshua Vera of the Elevate Cannabis outlet in Edmonton was pictured in the Global News despondently hanging a sign on the door of his business reading “SORRY, WE’RE OUT OF STOCK.” Vera described his stressful experience of the past weeks: “You’re not sleeping much. When something was uploaded to the system, it was a matter of literally seconds before it was gone.”

The Global News reported that stock was similarly exhausted or rapidly dwindling at most retailers in the Edmonton area (where Alberta’s dispensaries are clustered). Meanwhile, just a few were very well-stocked — presumably, those most adept at gaming the online system. The Fire and Flower retailer indicated it had “lots” of stock at all of its outlets.

AGLC’s Riaz Nejad said, “We’re not aware of any bots being used, we’re just aware of people being online 24/7 basically, trying to order product. And some were successful in achieving that and others were unsuccessful in achieving that.”

Under the new policy, each Monday, retailers will be given 24 hours to manually fill out an order form. The AGLC then divide what product it has among them.

“I think this fair allocation of the inventory will ensure every retailer gets a fair shot at some product instead of some maybe getting more and some getting none,” Nejad said.

Canada Dry: Cannabis Shortages Stretch Across Canada

The cannabis shortages have plagued provinces from British Columbia to the Maritimes. The Canadian Press reports that the province of New Brunswick was forced to temporarily close more than half its stores, while the Quebec Cannabis Corporation (or Société Québécoise du Cannabis) has restricted its store opening hours to four days a week. Labrador’s only cannabis outlet was forced to temporarily close its doors after being without any product for nearly two weeks.

Khurram Malik, CEO of Toronto-based Biome Grow Inc, said the shortages are in part due to strict regulations imposed by Health Canada on the country’s 132 Licensed Producers.

“The rules here are so difficult to grow cannabis… that if you’re a new license holder and you’ve never done this before, it’s going to take you a year, year-and-a-half, or two years to get any decent, consistent quality product out the door in any predictable volumes,” said Malik.

Outages in Ontario

Simple bureaucratic ineptitude also seems to be playing a role here. Global News reports that Ontario’s official Ombudsman has received more than 1,000 complaints about the province’s online cannabis store since it opened earlier this month. Complaints have concerned delayed deliveries, poor communication with customers and billing problems. The Ontario Cannabis Store warned on its website last week that delivery times for orders may be longer than expected due to “unbelievably high demand” and a labor action at Canada Post.

Retail stores are not expected to open in Ontario until April, with the provincial government to start reviewing license applications next month. In a bid to stop the emergence of vertical monopolies, provincial authorities just announced that retail licenses will not be issued to a company more than 9.9 percent owned by one or more Licensed Producers.

Industry voices have also protested this move as burdensome. The executive director of the Cannabis Council of Canada, Allan Rewak, told the Canadian Press he is “disappointed,” as some LPs who have invested in retail chains may be prevented from entering the Ontario market.

Saskatchewan Showdown with First Nations

Another question concerning control of the industry has emerged in Saskatchewan, where authorities are demanding the closure of a cannabis retail outlet operating on an indigenous reserve without provincial authorization. Saskatchewan Justice Minister Don Morgan was quoted by the Canadian Broadcasting Corp: “It would be our position that somebody setting one up without a provincial license would not be legal, would not be authorized. I would urge them to stop going ahead with it.”

The Muscowpetung First Nation, some 70 kilometers northeast of Regina, passed its own cannabis law by popular vote on Nov. 12 — with 86 percent voting in favor. The Mino-Maskihki Cannabis Dispensary opened the next day. Whether it remains open may help determine what Canada’s new cannabis order will look like, and establish the degree to which First Nations have sovereign power in the matter. With several of Canada’s First Nations looking to legal cannabis for economic development, the case will be closely watched.

A letter from Muscowpetung chief Anthony Cappo calling on band members to vote in favor of the law stated that “as a sovereign treaty nation, Muscowpetung has the authority to regulate the use and sale of Cannabis/Hemp within our Nation.”

TELL US, what should Canada do to avoid legal cannabis shortages?

3 Comments

3 Comments

  1. Iraj

    December 2, 2018 at 6:48 pm

    Those shortages did not start after cannabis became legal! I’m a medical cannabis patient and my licensed producer (Medreleaf) has been clean out of high THC strains since April. My clinic says that all of the LP’s have been out of stock since then. The greedy shysters have been stockpiling those strains for the recreational market and leaving medical patients with nothing but empty promises “it’ll be in next week”. I’m fed up being stuck ordering lower THC strains for the same price and having to use two to three times as much to get the same effect as the strains I normally use. I’m also sick of having to do without – without sleep, without pain relief – when I can’t afford to pay twice as much as I used to. My next order and all subsequent orders will be from black market online retailers. Screw the greedy LPs and screw the pretty boy jackass in Ottawa who said he’s hitting us with a sin tax because he thinks we’re all fakers using it recreationally. That’s the real reason they’re taxing patients.

  2. Maxcatski

    November 24, 2018 at 7:19 am

    First Nations are NOT nations and must follow regulations like everybody else.

    Cannabis shortages are the norm in every new jurisdiction. The huge demand always outstrips limited supply. Given unlimited production in Caanada, however, there will be more pot than we can consume in twelve months time. Prices will drop and the market will mature.

    In the meantime, I continue to legally self produce under the medical regulations. I got lots of pot!

    • Food4Thought

      November 30, 2018 at 8:32 am

      @Maxcatski First Nations should be allowed to sell cannabis with as little interference from the nanny-state as possible. Many tribes have been producing herbal remedies for thousands of years… Let there be competition and see how things play out. Right now, it’s all about big corporations and pharmaceuticals… Perhaps we need to let the free market do what it does best ; level the playing field #crony_capitalism #liberty_and_freedom #innovation

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