Spike in Medical Cannabis Demand Catches Tilray Off Guard

Article by Christina Pellegrini, Globe and Mail

Spike in medical cannabis demand catches Tilray off guard CHRISTINA PELLEGRINI CANNABIS INDUSTRY REPORTER Tilray chief executive Brendan Kennedy at company's head office in Nanaimo, B.C., on Nov. 29, 2017. CHAD HIPOLITO/THE CANADIAN PRESS Tilray products such as capsules, oils, and dried marijuana at the company's head office in Nanaimo, B.C., on Nov. 29, 2017. CHAD HIPOLITO/THE CANADIAN PRESS Mike Gorenstein, CEO at Cronos, in New York, on Sept. 4, 2018. BRENDAN MCDERMID/REUTERS

Tilray Inc. mistakenly predicted that the legalization of recreational cannabis in Canada would temper demand for medical marijuana, a forecast that it says has left the company short of supply and its patients scrambling to find alternatives.
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The cannabis company based in Nanaimo, B.C., said on Tuesday that because of inaccurate forecasts, it failed to make enough of a popular medical product. It also sold marijuana into the wholesale market to other producers and increased its exports overseas because it expected medical patients would buy recreational cannabis when it became legal on Oct. 17.
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Instead, demand for medical marijuana spiked, chief executive Brendan Kennedy said on a conference call on Tuesday with analysts after Tilray reported quarterly earnings.
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“I think most people in the industry were expecting some decrease in demand from patients,” he said. “What happened was we saw a significant increase in demand from patients in the days and weeks prior to legalization. That was pretty counter-intuitive to what we were expecting.”
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Patients across the country have faced shortages since recreational marijuana was legalized and producers have struggled to meet demand. The supply shortfall has prompted complaints from patients and doctors who have raised questions about the design of Canada’s two-track system for medical and recreational marijuana, which does not require producers to give priority to medical sales.
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Tilray’s online medical shop is nearly sold out. The company is selling two types of cannabis oil and did not have any flower available as of Tuesday. A day earlier, it was offering a third product, its most popular oil containing a high dose of cannabidiol (CBD), which the company says is used often for inflammation. On Monday, it could have been bought only by phone – not online – and customers could have bought just two bottles each. By Tuesday, it was sold out.

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