Article by Baystreet
Health Canada is reviewing the labelling requirements of cannabis producers amid growing complaints about the potency of products sold by companies such as Canopy Growth Corp. (TSX:WEED)
Smiths Falls, Ontario-based Canopy Growth has been the subject of complaints about its “TWD” brand that displays a flat 20% tetrahydrocannabinol (THC) potency. Aside from price, potency levels are one of the main criteria that Canadian cannabis users consider when purchasing products.
As a result, cannabis producers try to grow plants that yield potency levels above 20%, which is believed to be the preferred minimum potency among Canadian cannabis consumers. Canada’s licensed producers currently have more than one billion grams of cannabis collectively stored in inventory, as they believe it is of insufficient potency or quality.
Executives from several producers, such as Tilray (NASDAQ:TLRY) and Sundial Growers (NASDA:SNDL), have frequently stated that low THC potency is a weight on sales, resulting in either sizable inventory write-downs or missed revenue opportunities.