Cannabis shortage could last for years

The supply shortages that have plagued many provinces in the first month of legal cannabis will likely persist for years, industry insiders say.

British Columbia, Alberta, Manitoba, Saskatchewan, Quebec, Nova Scotia and New Brunswick have all reported varying degrees of shortages.

New Brunswick was forced to temporarily close more than half its stores, while the Quebec Cannabis Corp. has reduced its store opening hours to four days a week. Labrador’s only legal cannabis store said it was forced to temporarily close after being without product for nearly two weeks.

“Some licensed producers … have been unable to deliver the volumes that they had originally committed to,” said Kate Bilney, a spokeswoman for the B.C. Liquor Distribution Branch.

Khurram Malik, CEO of Toronto-based Biome Grow Inc., said the lack of supply is due in part to the tough regulations imposed by Health Canada on the country’s 132 licensed producers,

YOU’RE GOING TO HAVE INTERMITTENT SHORTAGES THROUGHOUT 2019 AND INTO 2020.

and the time required by companies to develop a quality and compliant product.

He said the federal department also took too long to approve licences.

“The rules here are so difficult to grow cannabis — quite frankly more difficult than anywhere else in the world — that if you’re a new licence 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, adding it’s much easier and cheaper to grow in jurisdictions such as California.

Malik said he suspects some companies did stockpile cannabis leading up to Oct. 17, but logistics such as packaging and shipping have held up distribution as producers navigate the red tape of a brand new sector.

“There may be empty store shelves right now in various provinces, but there’s product sitting in vaults ready to move. That will clean itself out in the coming weeks,” said Malik, whose company has facilities under development in Ontario and Atlantic Canada.

“Once that’s out of the way, then you’re going to have intermittent shortages throughout 2019 and into 2020 as people produce and ship right away.”

Health Canada said it has taken steps to improve the licensing and capacity of producers.