The cannabis shortage that’s keeping store shelves bare across Canada shouldn’t necessarily be pinned on the cannabis companies themselves, says entrepreneur and industry investor Brett Wilson, who claims that despite its best efforts, the Canadian government just wasn’t prepared for recreational pot onrush.
Initial excitement may have waned since cannabis shops of both the online and bricks-and-mortar variety opened up for business on October 17, but the realities of getting a fully-fledged industry up and running are now beginning to set in as retailers struggle to keep product on their shelves. Those supply shortages may have seemed unlikely less than a year ago when the market was awash in pot producers and startups all in the midst of massive build-outs, each one claiming to be on track for huge production numbers come legalization.
And while Canadian consumers are now left waiting for the tens and even hundreds of thousands of kilos promised by companies such as Tilray, Canopy Growth and Aurora, the blame should at least in part fall on federal and provincial governments whose slow pace at doling out the required licenses has been a big problem, says Wilson, chairman of Canoe Financial.
“The Canadian government had a prescient view. They thought ahead and, certainly, legalization made sense,” he says in conversation with BNN Bloomberg. “But we haven’t got the infrastructure yet in place to both supply and distribute cannabis to meet the demand that’s there. It’s the time it’s taking to get the license to grow, license to cultivate and license to distribute. I’m involved with dozens of smaller growers and it’s just a scramble.”
“The government forecasts were five, six, seven billion, kind of in line with wine or liquor. I think it’s two or three times that size,” says Wilson. “People are finding ways to consume that had never been contemplated. Stress and anxiety, that’s with CBD oils. It’s got nothing to do with the hallucinogenic side, the THC. CBD is exploding in its market acceptance.”
Canada’s publicly-traded pot companies have seen an explosion of investor interest, as well, starting last fall when then small and micro-cap companies started to take off, leading to a frenzy of investment both over December and January and then again in the lead-up to this year’s October 17 start date. Since then, however, there has been a noticeable drop-off, with some names losing half of their value over ensuing weeks.
Wilson says market volatility will be the name of the game for a while yet, especially considering the ongoing evolution of the cannabis market in the US.
“The market is a little confused over where the United States is going but I think it’s inextricably linked to the fact that state by state they’re approving recreational,” says Wilson. “And so, as that capitulates, then why wouldn’t the whole federal infrastructure capitulate and legalize marijuana?”
“Which then ties back to Canada —and Canada is right now positioned as a global leader. I’m very pleased with where we are as Canadians in terms of supplying cannabis to the world,” he said.