Just a year after legalization, we are already growing more weed than we can smoke.
The latest reports from Health Canada and Statistics Canada show that production is already passing retail demand for cannabis.
And with all the private capital that has rushed to grow legal marijuana, new capabilities are still emerging.
A survey by the Economic Council of the Atlantic Provinces found that another 100,000 kg of increasing capacity will be operational by the end of 2020.
Currently, the 20 Canadian Atlantic producers are producing 200,000 kg annually.
"We are moving towards rationalization," said Fred Bergman, senior policy analyst at the board.
As early as May of this year, Health Canada changed its rules to slow the growth of cannabis production – stating that any new additional license applications will have to come from companies with their production infrastructure already built.
"So this is essentially a limit," said Bergman.
"Because you won't be able to go to the bank and lend millions to build the facility before you even apply for a license."
This limit, however, did not apply to requests already received by Health Canada.
With supply exceeding demand that has so far grown for legally traded medicinal or recreational cannabis, the effort is to cut more grass from the black market.
A telephone survey from Nova Scotia Liquor Corporation earlier this year found that about 40 percent of people buying marijuana in this province were receiving legally – that is, from them.
Another 40% of respondents bought marijuana on the black market and on the NSLC. Then there was 20% buying only on the black market.
"If we know that 20% are buying exclusively from the black market and 40% are buying from both us and the illicit market, I would say we probably have about 40% more catches on the table," said Dave DiPersio, senior vice president of services. NSLC's corporate
"So we are competing."
But the numbers cited by DiPersio in the NSLC survey, which were not fully disclosed, refer to the number of consumers who buy marijuana legally and not the amount of product bought legally. According to Statistics Canada, Canadians bought 80% of their pot on the black market.
This is because people who smoke a lot of pot tend to buy in bulk.
The average price for an illegal gram in Canada is $ 5.63, according to Statistics Canada, while it is over $ 10 for legal material.
Due to the high levels of safety and testing required from legal growers, legal growers report average production costs of $ 4.68 per gram in 2018. This means growers have a long way to go if they want to compete in the price range. for consumers who can save about $ 150 an ounce black market purchase.
Statistics Canada has no estimate of how much it costs to put some seeds in pots in your backyard.
And Khurram Malik is not yet worried.
"For years I have predicted that supply by the end of 2020 will exceed demand," said the CEO of Biome Grow, who owns farming facilities in Antigonish and will soon go into production at his facilities in Newfoundland and Ontario.
"The problem is that there are so many low quality things out there that you can't legitimately sell."
Through its subsidiary Highland Grow, a subsidiary of Antigonish County, the Malik company is producing better quality cannabis with stronger doses of the active chemical THC.
The company is finding that Atlantic Canadians want stronger marijuana than those in other parts of Canada and there is no oversupply on the horizon.
The federal government promises to announce a plan to legalize edible production and sale in the coming months, which Malik said will provide a market for the lower quality pot currently stored.
Finally, your company's plan is to make most of its money by exporting cannabis to foreign markets as legalization spreads around the world and regulators from foreign countries are drawn to the high quality and regulation of cannabis production in Canada. .