Medical marijuana growth in Canada stalls as stockpiles rise

(This story has been updated from an earlier version)

Canada’s medical cannabis companies are bolstering their inventories ahead of adult-use legalization, even while signing up fewer new patients than ever, indicating an industrywide shift in focus to meeting demand in the upcoming recreational market.

As of the end of March, patient registrations with Canada’s licensed medical marijuana producers reached almost 300,000. That’s a 10% increase from the previous quarter – the slowest growth on record.

The country’s Parliament passed legislation last month allowing recreational cannabis sales to begin Oct. 17.

New data from Health Canada also shows that licensed producers continue to build up their inventories of dried cannabis and oil to head off any potential shortage.

The total amount of dried marijuana in licensed producers’ inventories reached 44,000 kilograms (97,000 pounds) at the end of March, a 13% increase from the previous quarter.

Cannabis oil inventories reached 14,600 kilograms at the end of March, up 31% from the previous quarter.

Together, companies have stockpiled 58,600 kilograms of cannabis.

A recent report by the Bank of Montreal estimated demand for medical and recreational cannabis in the first year of legalization at 337,400 kilograms.

Aaron Salz, founder of the Toronto-based Stoic Advisory consulting firm, said medical cannabis growth is stalling because licensed producers are reallocating efforts and capital.

“Companies are now intimately focused on building brands, inventory for the adult-use market, and even retail in some cases. That’s redirected past efforts of acquiring patients and medical market share,” he said.

“Whether or not this strategy is financially sound is yet to be determined, but its what investors are demanding. I think that’s all been the main driver of medical market slow down.”

Licensed producers are preparing for an impending wave of demand from the recreational market, said Alex Shiff, senior consultant for Navigator, a Vancouver, British Columbia, communications firm.

“There are forecasts for how much cannabis will be necessary to meet consumer demand, but these are simply estimates. As an industry, it is important to try and ensure that we do not have shelves sitting empty come Oct. 17.”

Matt Lamers can be reached at [email protected]

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6 comments on “Medical marijuana growth in Canada stalls as stockpiles rise
  1. Peter Lipskis on

    The Licenced Producer system was grudgingly created by a pot-hating Conservative government.
    Opportunists applied to Health Canada under FALSE PRETENCES to grow medical-marijuana, in order to gain entry (and attempt to monopolize) the lucrative future recreational market… code-word “capacity”.
    Excluding everyone else is the $cam of the century, with government as accomplice.

    • Mortimer (Randolph's brother) on

      Apparently, Peter, you too hate pot. Obviously, if your in the marijuana industry and your accountable to shareholders, you have an obligation to pursue whatever legitimate (legalized) venues available to you to further the interests of your Company. To do anything less, would be a disservice to those who entrusted their investments to you.
      It sounds as though this a case of “sour grapes”… you simply didn’t get in on the $$$ when YOU had the chance and now, your pretty upset about it. (You still could if you pay attention, BTW).
      This is not a scam. It is simply the Government, for once, following the will of the people. They said they wanted legalized marijuana in Canada. Now they will finally have it. The fact the you have a problem with it, is entirely yours.

      • Bob on

        LP’s are doomed Mortimer…

        The 12 million Canadians present users will not buy LP’s junk.

        LP’s will cater to newbies and most will green out and won’t come back, while the rest will purchase a gram a week.

        • Miháy on

          I don’t thing LP’s are producing junk.
          They are producing high quality and unique strains that are inspected, bottled, marketed and comes with a liability warranty like any other item sold in the market.

          The boot legged industry need to wake up and start patenting there crop before it’s claimed and duplicated. If they don’t then your just a bystander and when the dust is cleared your empty.

          Start patenting and get a craft grower license

    • Maxcatski on

      Wow, that’s quite the theory. Luckily, the government did NOT exclude everybody because everybody in Canada will be allowed to produce their own cannabis. Ah, yes, self production will be our salvation.

      Besides, those big corporate interests are made up of people, too, who appreciate the job. And the shareholders seem pretty happy, too. It’s all good.

  2. Dr. Patricia Parsons on

    Is it to the small investor’s advantage (400 sh Medreleaf, cost basis $15.00, to allow it to be acquired by Aurora, or sell it for small profit before the acquisition is approved, and releasing the shares
    is mandatory?

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