Licensed producers of cannabis in Canada are faced with a lack of variety in their product offering due to a small number of seed variety.
The situation in Canada is not really starting to stabilize, even as we keep moving away from the legalization date which was over a month ago.
One of the main contributors to the poor situation has definitely been the shortage everyone has been talking about.
Market analysts foresaw the monstrous shortage looming over the market in the days before October 17th, but nobody really seemed to care at that point.
Everyone just wanted legal weed, STAT.
So, the legislators obeyed and set up a framework which made weed legal at the cost of the black market, or at least they hoped to achieve that.
The result so far has been somewhat opposite to the one they hoped for: the public is now just outraged with the pricing the provincial distributors and retailers imposed.
However, that’s not even the worst oversight they made. In rushing to legalize cannabis, the provincial distributors stretched themselves and the system too far.
The results of that have been some serious oversights by both the regulators and the licensed producers who we trusted with supplying the whole market.
In provinces where the provincial legislators decided sales will be conducted solely through the Crown corporations, business hasn’t really been going that well, namely Ontario
To be fair, private retailers will have the option to sell cannabis in Ontario, but only as of April. Until then, everyone is in the mercy of the OCS.
Lack of variety
One of the biggest problems shoppers have had so far, aside from ridiculous pricing, is the small range of strains and products offered on the shelves.
This is due to the small variety in seeds that the licensed producers managed to obtain.
Traditionally, licensed producers put out same strains until they decide to introduce new ones, which doesn’t happen often.
However, with the wider legalization happening, and more access to seeds across the board, the LP’s are now planning on upping their offer.
Licensed producers have come out in support of small-time growers, and micro-license operators as they see potential partners in them.
Health Canada has reported that so far they’ve received only 15 applications in the micro class to cultivate or process cannabis.
Licensed producers have announced that they’ve already negotiated and made agreements with certain small growers. Some have even signed supply deals.
It’s important to note that some of these growers have applied for a license, some of them are already operating under a medical license, while others are still operating illegally.
Canopy Growth, one of the biggest producers in Canada, is said to be looking into these options.
Jordan Sinclair, vice-president of Canopy Growth Corp, said that the company is actively looking into craft growing and improving their own product offer.
“It’s a very competitive space, even early on, so we have a lot of interest from micro growers and prospective micro growers who are wondering how they are going to get their product to market,” Mr. Sinclair says. “It could be someone coming from the black market who wants to transition over, or it could be someone who used to grow cannabis in the medical system.”
He went on to say that each deal Canopy Growth makes with small growers are personalized to that grower.
Cam Batley of Aurora Cannabis said that his company can’t be seen working with anyone outside of the legal circle. He also pointed out that he sees the necessity to work with growers who own micro licenses.
That is probably a good call for Aurora in the light of what happened to Ascent Industries, as just a few days ago they had their production licenses suspended by Health Canada.
Ascent Industries’ subsidiary Agrima Botanicals is the first LP ever to have its license suspended, as Health Canada said that the company “did not meet recordkeeping and other compliance requirements” during an August inspection.
After the company fired its CEO, appointed an interim CEO, and submitted the records Health Canada was lacking, Ascent got a reply from HC that they didn’t see coming.
Health Canada issued a letter to Ascent that it intends to revoke Agrima’s licenses.
Having that said, Canopy Growth is most certainly confident in the ability of their lawyers to pan out every detail and make so that these micro growers find a place in the system.