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Why is Canada running out of marijuana?
Cannabis retailers in Canada began to run low on supplies from the very first day of legalisation a month ago. How long are shortages expected to continue as the new market for recreational cannabis finds its feet?
In the early days of legalisation, James Burns was confident his company had enough product on the shelves of its five new cannabis retail stores, even though they only received half of their order from the provincial supplier. Now, he has had staff refreshing the government supply website in the early hours to snap up scarce new stock as soon as it's available, and is considering restricting store hours.
"While there was product to order we were very comfortably getting a large amount of it," says Burns, the CEO of Alcanna, a company that owns a chain of private liquor stores in Canada and the US and, now, cannabis stores in the province of Alberta. "But obviously, when there's literally none there, it doesn't matter how big you are, there's just none there. If the government warehouse is empty, it's empty. There's nothing you can do."
[...] A report released in early October by the CD Howe Institute, a Toronto-based economic think tank, estimates that the current legal supply will meet about 30% to 60% of total demand in the first months of legalisation. But people in the industry say the scarcity is worse than expected. "Everybody knew this was going to happen," says Burns. "Probably, frankly, not this quick and this starkly."
Patrick Wallace, owner of Waldo 420 in Medicine Hat, Alberta, predicts it will be a year to 18 months before supply matches demand. "We're riding on our initial investment of stock from a few weeks back," he says. "So we're OK now but it's not sustainable."
Previously: Canada Becomes the Second Nation to Legalize Cannabis
Peter Thiel's Cannabis Company Was Briefly Worth More Than Twitter
Hostage to NAFTA? Canada Signs on to War on Drugs Despite Recent Cannabis Legalization
Cannabis Becomes Legal in Canada
(Score: 0) by Anonymous Coward on Friday November 16 2018, @05:47PM (4 children)
I know a guy who knows a guy. There is no shortage of weed in this part of Canada. And bonus, it's cheaper than government weed.
(Score: 2) by Osamabobama on Friday November 16 2018, @06:21PM (3 children)
Somebody earlier mentioned the invisible hand; do legal weed retailers have the ability to adjust price to compensate for lower supply? These shortages sound like the textbook case for raising prices to reach equilibrium. In contrast, most news stories about shortages involve food or fuel, which have an 'anti-gouging' attitude that keeps prices low (by government fiat) during natural disasters.
In this case, there is no credible argument that marijuana is an essential, so why don't prices rise to meet demand?
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(Score: 0) by Anonymous Coward on Friday November 16 2018, @06:29PM
no cause the demand is for weed legal or not so if the legal price is to high above the illegal weed no legal weed will be sold and that is not the objective of weed legalisation in Canada
(Score: 0) by Anonymous Coward on Friday November 16 2018, @07:55PM
When your competitors don't have supply problems, you can't easily raise prices to compensate for your own self-inflicted issues.
I don't believe people seriously thought it wouldn't be this bad. Everyone with half a brain saw this coming. It is truly unbelievable how the provinces were so unprepared for legalization, even with years to prepare for it.
For example, the fact that the closest retail store to the nation's capital is in Mirabel, about 150km away, just boggles my mind.
(Score: 2) by dry on Sunday November 18 2018, @06:15AM
Weed retailers are limited by having to follow regulations, no cheating with massive doses of fungicides or any other pesticide. And the tax, which is supposed to be designed to be low enough that it isn't a handicap, but each Province is free to set some of that tax and some may go too high.
One of the whole ideas of legalization is to kill the black market, much like the end of prohibition mostly killed off the bootleggers. I can easily find some black market pot if I like, but would have a hell of a time finding a bootlegger, and most of the ones that exist, sell legally or at least semi-legally bought alcohol, just after hours or in a town or reservation where it is banned.