Canada Continues to Experience a Severe Legal Cannabis Shortage
More than a month after full legalization, Canada is still struggling with a severe shortage of legal cannabis products. According to representatives from National Access Cannabis Corp, the country’s largest private retailer of recreational cannabis with a network of 17 stores, the shortage is so acute that employees must monitor wholesalers around the clock to immediately purchase any cannabis that becomes available in stock.
“Sometimes, at 3 a.m., a small batch of cannabis worth about $4,000 appears on the market for just a few minutes. But if you don’t buy it right away, other dealers will snatch it up in seconds,” explains Mark Goliger, the company’s director.
The shortage is being felt in every province, prompting some regions to take emergency measures to reduce demand. For example, Quebec authorities recently decided that, until further notice, cannabis stores in the province will operate on a reduced schedule—only four days a week. In Alberta, which currently has the vast majority of private retail stores, the government has stopped issuing new cannabis retail licenses until the shortage is resolved.
Given the situation, Goliger has also had to abandon plans to expand his retail network to 50 stores, at least until the wholesale supply situation improves. (Thirteen of the company’s 17 stores are in Alberta, where 12 more locations were planned to open by the start of the new year.)
“We already have the money and staff to open new stores, but we’ll have to put those plans on hold because there’s simply nothing to sell,” Goliger notes.
In addition to these plans, Goliger’s company hopes to convert two coffee shops recently acquired from Second Cup Ltd into cannabis stores, and to open at least 20 retail locations in Ontario, where authorities will begin issuing retail licenses in early December. The first retail stores in Canada’s most populous province are not expected to open before April of next year.
Although Ontario law prohibits cannabis producers from operating more than one retail location in the region, NAC, as a reseller, is technically allowed to open up to 75 retail outlets under local regulations. This number could potentially be exceeded if more Second Cup coffee shops in the province are converted into cannabis stores.