Canada’s Legal Pot Market Won’t be Able to Meet the Staggering Demand if Legalization Happens Next Year: Experts

Article by Jacquie Miller, Ottawa Citizen

Canada's legal pot market won't be able to meet the staggering demand if legalization happens next year: experts

Inside a nondescript building in an industrial park in Carleton Place, construction crews are building growing rooms for cannabis plants.

RockGarden Medicinals is the third medical marijuana grower to pop up within an hour’s drive of Parliament Hill. The mother-son team behind the business is hoping to be awarded a licence from Health Canada this summer.

It’s part of a green rush of grow-ops as Canada moves to legalize recreational marijuana. The federal government’s target date is July 1, 2018.

But don’t plan a Canada Day 2018 shopping bonanza at your local pot shop yet. Canadians may be more likely to find empty shelves — in provinces where stores are even up and running — and shortages.

That’s because there will not be enough marijuana produced to meet the demand, say a range of cannabis industry experts.

Canada’s medical cannabis growers now supply about 170,000 patients, and many producers regularly sell out or run short of strains, says Aaron Salz. He was the first investment analyst on Bay Street to specialize in Canada’s cannabis industry, and is now a consultant to some of the big growers.

The industry won’t be able to expand quickly enough to immediately supply all the Canadians who might want to buy recreational marijuana, he says.

Between four million and six million Canadians will use cannabis recreationally next year, says Health Canada, drawing on estimates from both government and private sources.

In 13 months, when “the taps are turned on” for legal recreational pot, says Salz, “We are going to have a supply shortage. I’m highly confident of that.”

A shortage would compromise one of the government’s major goals in legalization: stamping out the black market.

Health Canada recognizes the problem. In late May, the department announced it was streamlining the process and almost doubling the number of staff assigned to review applications for growing licences. The changes also make it easier for the 45 existing producers to expand. But while applications will be handled more quickly, the rigorous requirements for safe production and security still apply.

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