Warehouses in Canada are piled high with unsold marijuana after cannabis producers overestimated demand for the drug, which was legalised a year ago. Across the country, cannabis inventories came to almost 400 tonnes at the end of August, enough to cover two-and-a-half years of demand, according to the latest government data. Meanwhile the price of the drug has slumped as legal and illegal cannabis distributors grapple for market share. The stockpile suggests that one year after Canada became the first large economy to allow nationwide recreational use of cannabis, the industry has overestimated how much the country’s pot-smokers can burn through — and underestimated the illegal market’s ability to respond to competition. “There is a huge surplus of cannabis just for domestic demand,” said Matt Bottomley, analyst at Canaccord Genuity. Canopy Growth, a company listed in Toronto under the ticker WEED, said it harvested 40,570kg and wrote down C$15.9m ($12m) worth of inventory in the three months to the end of September. Aurora Cannabis, a competitor, reaped 41,436kg. Each company’s production alone was enough to meet the entire nation’s legal recreational demand, according to Cannabis Benchmarks, a data group. The excess production and the battle with the illicit market are feeding through to prices. Cronos Group, another Toronto-listed producer, disclosed it sold dry cannabis for C$3.58 per gramme in September, down more than one-third from the start of the year. “The consumption of cannabis is not keeping pace with the accelerated growth in kilogrammes being harvested,” said Cannabis Benchmarks. Investors flocked to shares of local pot producers such as Canopy, Aurora, Cronos Group and Tilray as Canada was legalising the drug, but customers are proving loyal to the illegal market. Analysts ArcView and BDS Analytics expect the size of the legal market to triple in the next five years, which would take at least $1bn in share away from street drug dealers. For now, though, legal sales for the recreational and medical markets will total $1.9bn this year, analysts estimate, lagging behind the $2.3bn in illicit sales. Legal distribution channels have been slow to develop, as they are tightly constrained by provincial governments. Ontario, the most populous province with 14.5m people, is served by only 24 stores. Its premier Doug Ford said this week the province was seeking to scrap its lottery for retail pot licences, a move that could allow more stores to open, Canadian press reported. “Since legalisation, there really haven’t been enough outlets for interested consumers to get products,” said Al Foreman, chief investment officer of Tuatara Capital, a $350m cannabis-focused fund manager. Recommended FT Magazine A mother’s fight to get medical cannabis for her son Producers are holding out hope for “Cannabis 2.0”, the second phase of legalisation, which will introduce edible and vaping products. Their concentrated formulas use large amounts of plant material, holding the potential to draw down inventories, according to Jonathan Rubin of Cannabis Benchmarks. Canopy chief executive Mark Zekulin said at the company’s latest results announcement that provinces had cut their purchases to reduce inventories and “retail store openings have fallen short of expectations”. Canopy, whose biggest shareholder is alcoholic drinks giant Constellation Brands, reported a quarterly net loss of C$374m on revenue of C$77m.
Canada racks up 400-tonne cannabis mountain after production binge
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CalyxCrusher
Well-Known Member
Funny how a bad product doesn't sell, go figure.
The Hippy
Well-Known Member
And they keep on growing it. This should compound pretty quick imo. Soon to be a million tons of useless dirty moldy pesticide ridden unsalable floor sweeping schwaggs. BOYCOTT BOYCOTT
AquaTerra
Well-Known Member
Its not even that, it just shows you they thought people would lose control and spend all their food and living expense money on buying weed like some crack heads but in reality no one gives a shit about buying legal weed. The people that I know that bought legal weed, was on the first few weeks of legalization as novelty or stupid rich fucks who want to show off their $25/gr grams to other rich fucks lol
AquaTerra
Well-Known Member
I got a buddy who is loaded and will only buy the most expensive legal weed he can find so he can say he's has expensive weed.lol they just GET TOLD
and Never buy shit again..
The Billionaire I know only buys THE BEST..
but it aint from any LP ..only because he knows better..calls them french cigarettes lol eh dman
westcoast420
Well-Known Member
Theres always people like that, look at people that buy $3000 bottles of wine, they couldnt tell any different from a $20 bottle but its because they can and makes them feel good lol.
Kassiopeija
Well-Known Member
but the most expensive is always the best... thar's what they say...
Cannasaurus Rex
Well-Known Member
You just figured out how the tarsands were created, we sell the rez for petroleum production. No carbon footprint from weed growing eh? LOL
Cannasaurus Rex
Well-Known Member
If what I hear is correct about edibles, there will be a 10mg thc limit per package? Again people/patients are going to look elsewhere, Have to buy about 4 packs to get a buzz. Canna hemp chews anyone? Anyone? Hey the dog likes them.... wonder about the cat.........Infused catnip, now there's market potential....hmmmm....good for kitty, hilarious for owners may be worth the money anyone? anyone? fuck sakes there goes my weed stocks again....
Cannasaurus Rex
Well-Known Member
Product testing has determined the infused catnip has detrimental effects on Kitty, Seems he gets high (4 packs..geesus) and just sits on the couch like a bulldog, licks his balls and knocks the ps4 controller out of my hands for 3 hours. Maybe we should have tested the catnip before I invested my life savings on this innovative new product. Kitty switched to the bong, and took control of the TV, and gave me that gangsta Kat stare. Kinda freaked me out as I am sitting on the floor beside the couch eating his shitty infused catnip...wtf while he is running rampant through C.O.D. black ops. I HATE cats.....and.....drugs are bad mmmm'kay.
CalyxCrusher
Well-Known Member
Clearly....... I mean look at LPs and the money they've invested........ Lol
