Illegal Dispensaries Hurting Canada’s Licensed Producers

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The CEO of Tilray, a licensed medical cannabis producer in Canada, says the failure of Vancouver to regulate unlicensed dispensaries is negatively affecting the company’s business results.

Greg Engel said the proliferation of federally illegal dispensaries in British Columbia “has been a challenge,” according to a report in the Georgia Straight.

Only 7% of the cannabis grown by licensed producers has been shipped to British Columbia, even though almost half of the country’s registered medical marijuana patients live in the province.

Tilray announced in June it would eliminate 61 positions, and Engel said the company has delayed a plan to expand its 60,000-square-foot facility to one that’s five times larger, according to the Straight.

Tilray and other licensed cannabis companies in Canada have run into multiple headwinds as of late, in part because of the proliferation of illegal dispensaries and slower-than-expected patient growth.

The amount of medical marijuana sold by licensed producers has more than doubled since the second quarter of 2014, but stockpiles have jumped fourfold, according to the Straight.

Still, the country’s changing MMJ landscape has created opportunities for producers. A new law issued in July allows companies to produce and sell cannabis oil, a change from the old rules that allowed them to only sell and ship flower. Some companies, including Aphria, already plan to expand their operations to produce and sell oils.