Federal claims of high cannabis supplies are “blowing smoke” over the actual product shortages that will continue to plague online and retail markets in Canada for some time, a new analysis says.
While recent Health Canada estimates pegging inventories of smokable cannabis at 19 times demand may be technically true, they don’t reflect the production industry’s ability to get finished goods onto store shelves or Canada Post trucks, Brock University pot expert Michael Armstrong says.
“That (19 times number) is mathematically correct but it doesn’t really mean very much,” says Armstrong, who teaches operations management at the St. Catharines, Ont., school.
“It certainly doesn’t mean what they claim it means, that there’s lots of supply. There is very little finished dry cannabis actually available for customers,” he says.
Armstrong says there is a good amount of cannabis oil to be had and a lot of grown plants in the hopper.
“But most of that is raw material, or what we call ‘work-in-process inventory’,” he says, adding it takes between two weeks and two months to properly dry and cure the harvested weed.
“So a large amount of that you’re just waiting (on), you can’t do anything with that.”
More importantly, however, even products ready for consumption can’t be packaged and transported due to logistical shortcomings endemic in the industry, Armstrong says.
“Processing, packaging, shipping, scheduling, all that boring stuff that the CEOs didn’t worry about before (Oct. 17) legalization day,” he says.
Armstrong says Canada’s licensed producers have been expert at breeding, growing, marketing and conjuring up stock market and merger windfalls.
“All the glamorous stuff,” he says.
But as of last month, Armstrong says, only 15 per cent of the cannabis inventories were made up of finished products and less than half of that was distributed to provincial warehouses or actual store shelves.
“What Health Canada is doing is kind of like saying ‘there can’t be a bread shortage in Toronto because there’s lots of wheat in Winnipeg’,” Armstrong says.
“Well, wheat, yes, eventually turns into bread, but first you have to grind it into flour and then you have to bake it and, oh, by the way, you have to get it to Toronto,” he says.