Article by Madeleine Kelly, The Varsity
With cannabis legalization set for October 17, Ontarians over the age of 19 will soon be able to purchase cannabis online for recreational use through the Ontario Cannabis Store (OCS). However, you’ll want to submit your order early, because industry leaders and researchers alike are predicting that a product shortage will occur within the first year following legalization.
Health Canada’s most recent estimations place demand for recreational cannabis at upward of 900,000 kilograms, but according to a recent report co-authored by the University of Waterloo and the CD Howe Institute, supply will only total 210,000 kilograms — 23 per cent of demand.
Based on the total annual production capacity of the 13 cannabis cultivator companies listed on the Canadian Marijuana Index, that amount is closer to 230,000 kilograms, and that’s assuming each company will yield their maximum estimated outputs. The discrepancy between these output projections is negligible, and, regardless, comes far short of the predicted demand. However, each company has considerable expansion plans that should greatly increase its production capacities over the next couple of years, and the government expects supply to eventually overtake demand.
To remedy the expected shortage, the average consumer is then expected to continue procuring recreational cannabis on the black market, meaning that the government will have objectively failed its mission of snuffing out illegal producers and distributors with legalization. However, there are a few ways in which the province could curtail the severity of the shortage.