Cannabis Licence Approval Process Means Shortage Could Drag On

Article by Jennifer Brown, Canadian Lawyer

Canadian Lawyer MagLegal FeedsContributorsJennifer Brown Cannabis licence approval process means shortage could drag on A vendor weighs buds for card-carrying medical marijuana patients attending Los Angeles' first-ever cannabis farmer's market at the West Coast Collective medical marijuana dispensary, on the fourth of July, or Independence Day, in Los Angeles, California on July 4, 2014 where organizer's of the 3-day event plan to showcase high quality cannabis from growers and vendors throughout the state. AFP PHOTO/Frederic J. BROWN (Photo credit should read FREDERIC J. BROWN/AFP/Getty Images)

The current cannabis shortage could be stabilized by the spring of 2019, but it could eventually be replaced by a flood of product on the market that will then lead to lower prices and consolidation, say lawyers representing clients in the sector.

“It’s moving fairly quickly, and everyone is trying to get product to market, especially with the demand the way it is now and lack of supply. There is a real push for people to get through the application process and meet some of that demand,” says Michael Posnikoff, partner in the business law group at Norton Rose Fulbright LLP in Vancouver. “I’m dealing with about five clients that have applications in process.”

There are about 130 licensed cannabis producers in Canada right now but there are more than 500 licences still in the queue waiting for Health Canada’s stamp of approval. Even when producers receive their licence to cultivate, typically, it’s still another year before they can sell any product.

“Most people I know in the industry were predicting shortages of supply for a couple of years after legalization given the pace at which Health Canada was issuing production licences,” says Posnikoff. “As some of those production licences currently in the application stage move through to issuance, we will see supply gradually catch up to the demand.”

Posnikoff’s first cannabis client came to him in 2013. Many have been in the medical cannabis market for some time and are now migrating to the recreational market, while others are in ancillary markets such as packaging or making fertilizers and other products for the sector.

Read the full article here.

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