More Bad News For The Canadian Cannabis Industry
Canada completely blew its chance to be a cannabis leader
ew industries offer as much promise this decade as marijuana. After generating $10.9 billion in worldwide sales in 2018, Wall Street analysts are forecasting anywhere from $50 billion to $200 billion in global sales by 2030. While not every pot stock can be a winner, these would appear to be incredible growth figures for investors to piggyback on.
However, there’s been a wild divergence to date between the U.S. and Canadian cannabis markets.
Canada completely blew its chance to be a cannabis leader
Despite the U.S. federal government’s failure to legalize weed, quite a few marijuana stocks have flourished. We’ve witnessed two-thirds of all states legalize medical cannabis, with 11 states permitting adult-use consumption and/or retail sale. According to the latest edition of the “Marijuana Business Factbook” from Marijuana Business Daily, the U.S. sold anywhere from $10.6 billion to $13 billion in legal-channel pot last year.
Meanwhile, Canada has been a mess that simply can’t get out of its own way. Even though it’s the first industrialized country to give the green light to recreational marijuana, it’s failed to provide the blueprint for other countries to follow.
Many of its problems can be traced back to regulatory issues. For instance, Health Canada can be blamed for both slowing down the licensing process for cultivators and retailers, as well as delaying the launch of high-margin derivatives. A derivative is a non-dried cannabis product, such as an edible, infused beverage, topical, or vape.
But it wasn’t just Health Canada that made mistakes on the regulatory front. Some provincial regulators also failed badly. Ontario, which is home to almost 40% of Canada’s population, ran with a lottery system for dispensary licenses between Oct. 2018 and Dec. 2019. This lottery system saw just 24 dispensaries open in the first year in a province that could comfortably house 1,000 retail locations.
Without adequate distribution channels, the Canadian cannabis market has experienced everything from supply shortages to suffocating supply bottlenecks, depending on the province.
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