Chart: Canadian marijuana producers bolster inventories ahead of recreational cannabis legalization

(Look for this chart and more in the “Canadian Marijuana Industry & Market Snapshot Report,” which Marijuana Business Daily will release in the coming weeks.)

By Eli McVey

With Canada’s recreational marijuana market set to launch next summer, the country’s licensed medical cannabis producers are shoring up their inventories in anticipation of an eventual supply shortage.

Growth in the amount of dried marijuana and cannabis oil in producers’ inventories rose sharply from April through June, marking the largest quarter-over-quarter increase in more than two years. Even if the pace keeps up, many observers still expect demand will far outpace supply once adult-use sales officially begin.

Here’s what you need to know about the situation:

  • Existing licensed medical cannabis producers will likely be the sole providers of recreational cannabis once the market gets off the ground. Currently, there are 64 licensed medical marijuana producers, though just over half have jumped through the necessary regulatory hurdles that allow them to sell MMJ to patients.
  • Industry estimates put current licensed annual production capacity in the range of 60,000-120,000 kilograms (132,000-264,000 pounds). However, Canada’s Parliamentary Budget Office estimates that Canadians will consume between 378,000 kilograms and 1.01 million kilograms of cannabis next year, with a midpoint estimate of 655,000 kilograms.
  • Licensed producers are rushing to construct new facilities and expand production capacity, with announcements for new funding deals and development plans arriving at a torrid pace. Most recently, Canopy Growth – Canada’s largest licensed medical marijuana producer – announced a joint venture to develop a 1.3-million-square-foot marijuana greenhouse in British Columbia. And Alberta-based Aurora Cannabis is spending 100 million Canadian dollars ($82 million) to build an 800,000-square foot-production facility beside Edmonton International Airport.

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Eli McVey can be reached at [email protected]

One comment on “Chart: Canadian marijuana producers bolster inventories ahead of recreational cannabis legalization
  1. Donald L Moore on

    WOW, that must mean that in the next several years Canadian pot stocks will increase in value rapidly? The stocks will be volatile but once supply meets demand, then the stocks values may drop or not increase as rapidly. Also by that time the USA may have legalized medical marijuana in the states and there is another boom in America pot stocks and then eventually the US will also legalized recreational pot and that is another boom in pot stocks.

    Reply

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