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Just over a week after Canada became the first G-7 country to legalize marijuana for recreational purposes, provincial sellers report supply shortages and other challenges in getting the product to consumers .
Federal government officials and leaders of the country's major marijuana growers warned MarketWatch, in previous interviews, that the first few weeks, if not months, would not work like a clock after the October 17 legalization. The shortage of physical outlets in some of the country's largest provinces, the rotating postal strike that has impeded online orders, and the backlog of federal licenses have compounded what was already a difficult business.
"Yes, the" tight supply ", long evaded, is now a reality," Deepak Anand, Vice President of Business Development and Government Relations, Cannabis Compliance Inc., a marijuana consulting firm said Friday. Authorized producers certainly seek to provide more products. "
From the beginning: cannabis is now legal in Canada, but marijuana companies are waiting for a difficult start
In Quebec, the second most populous province in the country, the government said that its official store would only be open from Thursday to Sunday, closing the rest of the week as he did not have enough pot to sell. The online store will remain open and physical store closures will continue until further notice.
Quebec has agreements with only a handful of licensed producers, but even provinces that have signed many more supply agreements have suffered from problems.
The Ontario Cannabis Store, or OCS, an online retailer operated by Ontario's most populous province, Ontario, was receiving online complaints about delivery times and cancellations, as well as product quality. According to officials, the online store has made 100,000 sales within 24 hours and processed 150,000 orders since Tuesday afternoon. The OCS said it has enough pot to provide all the orders and receive more.
Shortages and delivery problems across the country have been exacerbated by rotating strikes at the country's national post office, Canada Post, which have affected different regions. For example, the post office told a Canadian newspaper that Toronto, the largest city in the country, is an "important mail and information processing center" and that striking workers to minimize the impact on services. the postal workers left their jobs in Toronto on Tuesday.
However, not all provinces have suffered problems. New Brunswick sold C $ 2.1 million worth of cannabis in the first week with few problems.
For larger licensed producers, the impact of shortages on sales and profits in the quarter is less clear. Buyers in Nova Scotia, who sells in government-run stores, and Alberta, who has private retail stores in several cities, reported receiving about 40% of the weeds ordered by producers of authorized powder pots in the country.
Not to be missed: Canada's Pot Festival features high demand, limited supply and glue-free stamps
The major producers with whom MarketWatch has been servicing Canada last week, such as Canopy Growth Corp.
GSC -1.95%
Tilray Inc.
TLRY, + 1.25%
and Cronos Group Inc.
CRON, -4.07%
were waiting for problems from the beginning.
"The system will not be perfect, and we should not expect it to be," Aurora Cannabis Inc.
CBA -6.01%
Chief Executive Cam Battley told MarketWatch in an interview last week. "It's a very complex national system, made up of 13 jurisdictions and all municipalities. Are you kidding me? It will take a little time to fix the problem, but everything will be fine. "
For new producers hoping to meet part of the demand, the road is not easier either. According to a Bloomberg report released Friday, Health Canada could take up to 341 days to process a new cannabis license application.
Marijuana stocks were blended Friday in the middle of a declining market and ended the week with heavy losses. The sector has seen seven consecutive days of decline before a slight recovery on Thursday. Life Sciences Marijuana Horizons
HMMJ, -1.85%
Exchange-traded funds fell nearly 17% this week, the S & P 500 Index
SPX, -1.73%
decreased by 3.9%.
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