The current cannabis shortage could be stabilized by the spring of 2019, but it could eventually be replaced by a flood of product on the market that will then lead to lower prices and consolidation, say lawyers representing clients in the sector.
Many cannabis producers are also trying to figure out how to operate at scale, says Matt Mauer, vice chairman of the cannabis law group and partner at Torkin Manes LLP in Toronto. “We hear stories of major crop losses, which also puts a dent in the supply chain.”
Even in the year leading up to legalization, producers who were licensed, such as Canopy Growth, were ramping up and expanding their facilities, but that takes time, too.
“If the major LPs had been able to build out faster and grow, that might have helped,” says Mauer. “And if they didn’t have crop losses, that might have helped. When you put those things together, it contributes to the fact we’re short [on supply]. On top of that, we have distribution issues and Canada Post has contributed to that as well.”
Mauer points out that Canada is not alone in dealing with supply issues after legalization. Other jurisdictions where cannabis has become legal have all experienced the same hurdles.
This article was originally published in Canadian Lawyer. To read the complete article, please visit the Canadian Lawyer website.