Whether we like it or not, pot (also called marijuana, weed or cannabis) is now legal for recreational use in Canada since Oct 17th, 2018. Estimations of the new taxable revenue that cannabis will generate in one year range from 4.9 billion to 10.5 Billion, creating a wide range of opportunities on one side for Canadian small businesses and perhaps great distress on the other side for peoples who are or will develop an addiction to it.
In the months since its launch, the results have been mixed, to say the least. Its sales suggest that regulations, product shortages, and other hurdles continue to bother citizens from purchasing from the legal market.
The early months of sales provided retailers with headaches surrounding a lack of supply and provincial laws limiting regions like Ontario from opening up sale points. Since the initial months of sales, Canada’s cannabis market has found itself with a series of pressing issues across the nation.
Reason for shortages
The main reason for the supply shortage is due to the slow rate of licensing producers. Health Canada, the agency in charge of reviewing and approving growing licenses, already has a backlog of over 500 applications, with a potential 500 to 1,000 more received this year. The agency so far has issued only 132 licenses and it may take years to process them all. The same Government Agency is also in charge of issuing the sales permits that producers need to sell their products. The waiting period for a sales permits averages around 341 days, meaning growers have to wait about 11 other months before they will be able to sell the cannabis they already have banked in their inventory. I hope for them it is not considered as perishable products.
They have noticed the following: By March of 2019, supply issues were mostly history. However, a decline in sales continues to occur, while the black market continues on. For them, it seems that it is business as usual.
Where The Market Go Next?
While recreational sales may continue to slide in the coming months, Canada still has plenty to see as positive gains in the market, namely, its presence in the global cannabis market. Canada’s first to market advantage has allowed numerous brands to establish themselves domestically before launching into the global market. With the struggle occurring across the nation, a pause for concern may be the right thing to do.
The market is likely going through growing pains which should be over as the market matures and corrections are made to specific regulations but over time it should stabilize.
Growing or selling pot for Joe Smith?
If you were planning on growing and/or selling cannabis, I am sure you consulted the federal and provincial regulations that are in place in each region.
However, when there is this much money in play, it’s not only a lucrative time for growers and distributors but also for merchants selling accessories, the tourism & hospitality industries, as well as the education and awareness sectors.
While most Canadians are not allowed to legally sell pot online or growing it. The consuming aspect had become easier and is considered almost like a household item for some.
Selling Pot Accessories?
It seems that a secondary market as developed meanwhile like selling Growing equipment, rolling tools, apparel, bongs, vaporizers, grinders, and storage are just the tip of the iceberg. People also needed books and videos revolving around marijuana, its impact and culture. However, it was important to research about the subject. Regulations intending to stop the “normalization” but since the application is different in each province, it is a real problem for the applicants.
Capitalizing on the Tourism & Hospitality
Ever since the State of Colorado legalized recreational marijuana in 2014, it has broken its tourism record every year. Canada was expecting to receive even more tourists after legalization, especially from our neighbors just south of the border. It seems to be a little too early to come to some sort of conclusion.
The main goal was; Information, Education & Awareness. Beginners to seasoned Internet users had many questions since legalization happened like;
- Where can I get it?
- What are its health risks?
- What are its medical benefits?
- What are the best accessories?
- What are the best healthy munchies?
- How do I talk to my children about marijuana?
- How long should I wait after consuming pot to drive?
These questions and thousands more have been searched online and hopefully, they were answered properly.
And this is just the beginning!
As the market matures, new opportunities revolving around marijuana will surface. Innovation within the industry is expected to increase and ongoing research is likely to help improve pot’s various applications within the medical context. The financial markets have also taken note. Some larger producers are now publicly traded and are worth billions of dollars. If you’ve invested in pot stocks a few years ago, you’ve likely already made a healthy profit.
Like I have mentioned at the beginning of this article; Love it or hate it, the legalized pot is now in Canada and it’s likely to stick around for the long run. The cannabis industry is certainly hoping that it will eventually become a thing of the past; I am not convinced that it will be easy because the implications at different levels are too wide. Despite the many challenges cannabis businesses face surrounding regulations; they are hoping that there are or will be solutions out there to help them resolve the actual storm.
My humble conclusion
I think this segment of the economy will take a long time to normalize because there are too many government agencies involved. Sincerely I think that before everything becomes normal there are some people who will be very disappointed with the end results.
The big players will surely be safe with their shareholders’ money, but what will happen with the small players? This story is certainly to follow in the months and years to come. We did not even talk about the social cost that will transfer to the youth generation. There so many questions that remain unanswered.
If you are feeling to get more information from the Government of Canada, please hit this link:
And in the end, I think everyone will assume his own reasoning on the matter. Please leave a comment, I think the subject is too important to remain silent.