Canadian cannabis companies have had a hard time finding a sweet spot when it comes to supplying the world’s largest national legal weed market. And, after more than a year of dramatic product shortages, licensed operators are now reporting a massive marijuana surplus.
According to the Financial Times, Canadian cannabis companies now have more than 400 metric tons – or just over 880,000 pounds – of cannabis in storage. And for brands and dispensaries that have spent the past two years trying their hardest to keep store shelves stocked, the industry is now dropping prices dramatically to clear out overcrowded inventory. Cronos Group, a Toronto-based cultivator, said that it sold dry flower for C$3.58 a gram in September, less than a third of the company’s pot price in January 2019.
“The consumption of cannabis is not keeping pace with the accelerated growth in kilograms being harvested,” a spokesperson for the marijuana analytics company Cannabis Benchmarks told FT.
For major Canadian marijuana producers, massive concurrent cultivation outputs in the third quarter of 2019 – from July to September – have left warehouses overflowing. At Aurora Cannabis, brand leaders said that they grew 41,136 kilos (91,350 lbs) of weed during those three months alone. Canopy Growth – another major player in the Great White North cannabis industry – reported cultivation of 40,570 kilos (89,441lbs) that company officials valued at $12 million – or just over $130 per pound. With all of that bud produced specifically for the country’s recreational market, industry experts said that the back stock of each of those brands alone could fulfill the sum total of all Canadian cannabis demand for at least another year.
“There is a huge surplus of cannabis just for domestic demand,” Matt Bottomley, an analyst at data collection agency Canaccord Genuity, told FT.
As prices fall and supply remains bountiful, experts predict that the industry’s supply will harmonize once Canadian cannabis regulators roll out vape products, edibles, and concentrates to the nationwide marketplace starting next month. Because those items can be made by extracting cannabinoids such as THC and CBD from overstocked product, market analysts expect supply and demand to finally start balancing out once dispensaries are fully stocked with a variety of product types.
For Canadian cannabis consumers who have spent months watching full-strength flower fly off pot shop shelves as soon as it arrives, the product surplus and price drops are heaven sent. So, stock up on flower while you can, Canucks, because the price is definitely right, for now.
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