Canada fears cannabis shortage by the time of legalization

The Canadian Liberal government has announced that cannabis used for recreational purposes will be legalized by July 1, 2018. Canada will thus be the first G7 country to legalize cannabis, unlike its American neighbor, where weed remains illegal at federal level.

The only problem is that Canada legalized medicinal cannabis in 2001, and since then the number of patients receiving prescriptions for medical cannabis has tripled in recent years. These figures are worrying producers, who are realizing that their supplies are running low. The expected legalization of recreational cannabis within the next year is likely to create a major shortage.

New licenses granted to companies

Last week Charles Sousa, Ontario's Finance Minister, raised the issue of a cannabis shortage at a semi-annual meeting with provincial and federal finance ministers in Ottawa. He told Bloomerg The biggest problem we face in the light of today's discussions is the problem of supply. We need to ensure sufficient supply if we are to succeed in reducing illegal cannabis consumption and the presence of organized crime.«

Companies are also scaling up to respond rapidly to consumer needs. Huge crops of medical cannabis are in the pipeline. In the province of Alberta, the company Aurora Cannabis is currently building a cannabis cultivation plant near Edmonton airport. Last week, the Canadian Ministry of Health also granted six new production licenses to Canadian companies. Today, no fewer than 50 companies have received production authorization.

Canadian financial analyst Alan Bronchstein notes, «They gave out almost as many permits in a single week as they did in an entire year in 2016.».

The government states that the main objective is to reduce or completely eliminate the black market that still exists in Canada. Prime Minister Justin Trudeau has also announced that, as part of the legalization process, Canadian citizens will be able to grow up to 4 cannabis plants per household. This measure should encourage individual production.

197 applications for licenses to grow medical cannabis are currently in the evaluation process. Existing businesses should receive authorization to produce recreational, which should limit the shortage to ensure cannabis sales volumes by July 1, 2018.

Mehdi Bautier