{"id":7511,"date":"2017-06-27T21:19:09","date_gmt":"2017-06-27T21:19:09","guid":{"rendered":"https:\/\/www.420magazine.com\/?p=6297"},"modified":"2017-06-27T21:19:09","modified_gmt":"2017-06-27T21:19:09","slug":"canada-ponders-an-unusual-drug-problem-a-shortage-of-marijuana","status":"publish","type":"post","link":"https:\/\/cannitrol.com\/blog\/canada-ponders-an-unusual-drug-problem-a-shortage-of-marijuana\/","title":{"rendered":"Canada Ponders An Unusual Drug Problem: A Shortage Of Marijuana"},"content":{"rendered":"<div id=\"wp_fb_like_button\" style=\"margin:5px 0 5px 5px;float:right;height:100px;\"><script src=\"http:\/\/connect.facebook.net\/en_US\/all.js#xfbml=1\"><\/script><fb:like href=\"https:\/\/cannitrol.com\/blog\/canada-ponders-an-unusual-drug-problem-a-shortage-of-marijuana\/\" send=\"true\" layout=\"standard\" width=\"450\" show_faces=\"false\" font=\"arial\" action=\"like\" colorscheme=\"light\"><\/fb:like><\/div><p>The biggest challenge for Justin Trudeau\u2019s forthcoming legal recreational marijuana market is a shortage of pot, the finance minister of Canada\u2019s most-populous province says.<\/p>\n<p>Ontario\u2019s Charles Sousa said a supply crunch was discussed during a meeting with provincial and federal counterparts this week. Canada is aiming to legalize recreational pot in the next 12 months, the first major economy to do so. One analyst said he\u2019s concerned the government could use a supply shortage as an excuse to delay rolling out the program.<\/p>\n<p>\u201cUltimately the biggest problem that appears after today\u2019s discussion is one of supply,\u201d Sousa said in an interview this week. Finance ministers were told demand is \u201cquite high\u201d for marijuana already in Canada, he said. \u201cSo we want to make certain that, when we do proceed, there is sufficient supply to accommodate the activity because what we\u2019re trying to do is curb the illicit use and organized crime that now exists around it.\u201d<\/p>\n<p>Trudeau\u2019s framework for legalization, unveiled in April, will rely on Canada\u2019s provinces to set up sale and distribution regimes, while at minimum selling recreational pot by mail beginning some time before July 2018. Key details including taxation remain up in the air. Federal Finance Minister Bill Morneau has said he favors a tax rate that will starve out the black market, one of the government\u2019s key objectives. \u201cThat as a conclusion would lead us to say taxation rates have to be low,\u201d Morneau told reporters after the June 19 meeting, where he said they discussed the need for a \u201ccoordinated\u201d approach.<\/p>\n<p><b>Initial Shortage<\/b><\/p>\n<p>Canada\u2019s burgeoning marijuana industry has ballooned in value amid optimism over Trudeau\u2019s plan for recreational sales, which Canaccord Genuity Group Inc. said in November could reach C$6 billion ($4.5 billion) annually by 2021. Combined demand for recreational and medical marijuana may reach 575,000 kilograms by 2021, according to the report.<\/p>\n<p>The government says a key aim is to shrink or altogether kill the black market, and any shortage of legal weed would hinder that effort. Trudeau\u2019s plans also allow people to grow up to four plants in a home.<\/p>\n<p>Companies are still in the midst of trying to build and expand their facilities and everything would have to go \u201cperfectly\u201d in order to have enough supply, PI Financial analyst Jason Zandberg said. Initial sales will probably be online and by mail as it wouldn\u2019t be possible for the market to stock enough inventory in government dispensaries across the country.<\/p>\n<p>Expanding patient lists are creating a shortage in Canada\u2019s medical marijuana market as some producers stop taking new clients or sell out of certain strains, Zandberg said.<\/p>\n<p>\u201cThere will be a shortage initially,\u201d the analyst said by telephone. \u201cMy concerns are that if that is used as an excuse to push the date of recreational legalization back, there\u2019s a danger that it slips into the next election cycle and doesn\u2019t actually happen.\u201d<\/p>\n<p>Canada had 167,754 registered medicinal marijuana users as of March 31, triple the amount from a year earlier. Supply shortages are already a problem for Canada\u2019s existing legalized medicinal market, said Greg Engel, chief executive officer of Organigram Holdings Inc., a Moncton-based producer.<\/p>\n<p>Companies \u201care building out additional capacity very actively and aggressively\u201d for both the medicinal and recreational markets, Engel said. Organigram\u2019s capacity is 6,000 kilograms annually and will reach 26,000 kilograms annually by the end of 2018, he said, though companies still don\u2019t know exactly what they can sell. \u201cWe do need clarity very soon from the federal government.\u201d<\/p>\n<p><b>Production Cycle<\/b><\/p>\n<p>Health Canada pledged last month to speed up its approval process for applicants seeking a license to grow marijuana. The agency has been more responsive but it still takes up to a year for a new producer to ramp up production and get product to market, said Cam Mingay, a senior partner at Cassels Brock who follows the industry.<\/p>\n<p>\u201cI don\u2019t know what anyone can do about it &#8212; you can\u2019t force the plants to grow faster,\u201d he said when asked about a shortage. Approving more companies wouldn\u2019t be a silver bullet. \u201cYou could approve 50 more tomorrow, and realistically they could probably be in production by the end of 2018 in any meaningful capacity.\u201d<\/p>\n<p>While the government has issued a number of new licenses, it may still take 12 months or more for new companies to start ramping up production, said Beacon Securities analyst Vahan Ajamian. The available supply hasn\u2019t kept pace with the growth in medical marijuana patients and it\u2019s unclear what type of products will be available on the legal market next year and the level of taxation, he said.<\/p>\n<p><b>Rushed Timeline<\/b><\/p>\n<p>\u201cOn July 1, are millions of people going to go online and start buying legally or will there be a slow transition over the next five years from the black market to the legal regulated market?\u201d Ajamian said.<\/p>\n<p>Manitoba Finance Minister Cameron Friesen has expressed concern about the timeline, saying it is too rushed to implement a legal market for recreational marijuana by July 2018. Sousa said his government has no problem with the implementation date &#8212; which sets up the pot regime to kick in sometime around an election next year in the province. Ontario is eyeing a number of options for setting up retail sales, Sousa said, though he acknowledged other provinces are at different stages.<\/p>\n<p>\u201cWhat we want is to basically be sure that all of Canada is able to implement and distribute at the same time,\u201d he said. \u201cI think some provinces are still trying to come to grips with how to get it done.\u201d<\/p>\n<p><img src=\"https:\/\/cannitrol.com\/blog\/\/wp-content\/uploads\/2017\/06\/canada-ponders-an-unusual-drug-problem-a-shortage-of-marijuana.jpg\" alt=\"\" border=\"0\" \/><\/p>\n<p>News Moderator: Ron Strider <a href=\"http:\/\/www.420magazine.com\/\" target=\"_blank\" rel=\"noopener\">420 MAGAZINE \u00ae<\/a><br \/>\nFull Article: <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2017-06-23\/canada-ponders-an-unusual-drug-problem-a-shortage-of-marijuana\" target=\"_blank\" rel=\"noopener\">Canada Ponders an Unusual Drug Problem: a Shortage of Marijuana &#8211; Bloomberg<\/a><br \/>\nAuthor: Josh Wingrove and Jen Skerritt<br \/>\nContact: <a href=\"https:\/\/www.bloomberg.com\/feedback\/\" target=\"_blank\" rel=\"noopener\">Bloomberg.com Feedback<\/a><br \/>\nPhoto Credit: THINKSTOCK<br \/>\nWebsite: <a href=\"https:\/\/www.bloomberg.com\/\" target=\"_blank\" rel=\"noopener\">Bloomberg.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The biggest challenge for Justin Trudeau\u2019s forthcoming legal recreational marijuana market is a shortage of pot, the finance minister of&#8230; <a href=\"https:\/\/www.420magazine.com\/2017\/06\/canada-ponders-unusual-drug-problem-shortage-marijuana\/\" class=\"read-more\">[Read More]<\/a> <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1616,9,1,3],"tags":[4184],"_links":{"self":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts\/7511"}],"collection":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/comments?post=7511"}],"version-history":[{"count":0,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts\/7511\/revisions"}],"wp:attachment":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/media?parent=7511"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/categories?post=7511"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/tags?post=7511"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}