According to the CBC, three of Canada’s largest provinces will see a delay in new Cannabis 2.0 products reaching store shelves. Ontario, Quebec and Alberta all have their cannabis distribution managed through their own centralized distribution systems.
This extra level of distribution bureaucracy will add enough extra time to the supply chain to delay new products from Phase 2 of cannabis legalization until January.
Ontario, Quebec and Alberta run their own distribution systems, rather than allowing producers to ship directly to retailers, and regulators in all three provinces have said no derivative products will be available before mid-to-late January.
In Alberta, this will be a disappointment for a province where the legal cannabis industry has had a very good year in 2019. With over 300 retail locations opened up in Year 1 and roughly 350 stores today, Alberta has been the bright light in Canada’s cannabis industry for 2019.
However, for legal cannabis companies with operations more heavily focused in Ontario and/or Quebec, this just adds insult to injury.
Combined, Ontario and Quebec have less than 50 cannabis stores open today. That’s spread across roughly 23 million people – 60% of Canada’s entire population.
Ontario has been the biggest failure purely in terms of opening stores. But Quebec’s cannabis-phobic government has arguably created the most-restrictive rules for cannabis consumption among all of Canada’s provinces.
The province’s anti-cannabis paranoia could lead to even greater delays in stocking Cannabis 2.0 products.
In Quebec, the issue is more complicated, since the province approved stricter regulations in late November which, for example, banned some kinds of candies and chocolate that are legal elsewhere in the country.
Of Canada’s largest provinces (by population), only British Columbia is expecting initial product offerings for Cannabis 2.0 in time for Christmas.
B.C. has been Canada’s other big disappointment among the larger populations in Year 1 of legalization, with one of the lowest per capital consumption rates in Canada. The province was also slow in rolling out stores. This has been compounded by anecdotal reports of excessive prices and mediocre product quality among initial retailers.
In B.C., however, robust sales of some cannabis “sugar plums” this holiday season could take some of the sting out of a disappointing 2019. Along with several of the smaller provinces, at least some cannabis consumers will be buying their first (fully legal) cannabis edibles and infused beverages this Holiday Season.
As noted in a recent Seed Investor article, two of Canada’s largest LP’s – Canopy Growth (US:CGC / CAN:WEED) and Aurora Cannabis (US:ACB / CAN:ACB) – will be leading the charge in introducing these next-generation cannabis products.
These companies have already publicly announced their initial line-up of new cannabis products. Many other cannabis companies, including B.C.-based Tilray (US:TLRY) are also racing to try to get products to market before December 25th.
Christmas 2019 won’t be quite as “merry” from a cannabis standpoint as was expected back in October when Phase 2 officially kicked in. Perhaps that’s appropriate?
This year may very well rank (in hindsight) as the worst year ever for the emerging cannabis industry. Next year will be better. In Canada, the New Year will mark the real debut for Cannabis 2.0.