“Yes, the long-eluded-to ‘supply crunch’ is now a reality,” Deepak Anand, vice president of business development and government relations at marijuana-consulting company Cannabis Compliance Inc., said Friday. “Licensed producers are certainly looking to supply more product.”
In Quebec, the country’s second most populous province, the government said its offical store would only be open from Thursday to Sunday, closing the rest of the week because it didn’t have enough pot to sell. The online store will remain open and the bricks-and-mortar retail closures will continue until further notice. Quebec has set up agreements with only a handful of licensed producers, but even provinces with many more supply agreements suffered from issues.
The Ontario Cannabis Store, or OCS, an online retailer operated by the country’s most populous province, Ontario, was receiving complaints online about delivery times and cancellations as well as quality of the product. Officials said the online store made 100,000 sales within the first 24 hours and as of Tuesday afternoon had processed 150,000 orders since Oct. 17. The OCS said it has enough pot to supply all the orders and continues to receive more.
Shortages and delivery issues around the country have been compounded by rotating strikes by the country’s national post office Canada Post, which have affected different regions. For example, the post office told a Canadian newspaper that Toronto, the largest city by population in the country, is a “significant mail and processing hub” and striking workers are making the “best efforts to minimize any impact on service.” Roughly 9,000 postal workers walked off the job in Toronto on Tuesday.
Not every province has suffered from problems, however. New Brunswick sold C$2.1 million worth of cannabis the first week with few issues. For the largest licensed producers, it’s less clear how the shortages will affect the quarter’s sales and profits. Buyers in Nova Scotia, which sells in government-run stores, and Alberta, which has deployed private retail stores in several cities, said that they had received about 40% of the weed they ordered from the country’s licensed pot producers.
“The system won’t be perfect out of the gate, and we shouldn’t expect it to be,” Aurora Cannabis Inc Chief Corporate Officer Cam Battley told MarketWatch in an interview last week. “It’s a nationwide, very complex system with 13 jurisdictions, plus all of the municipalities. Are you kidding me? It’s going to take a while to iron out, but it’s going to be fine.”
For new producers hoping to meet some of the demand, the road is not easier either. According to a Bloomberg report Friday, Health Canada may take take up to 341 days to process a new cannabis sales license application.
Marijuana stocks were mixed Friday amid a sliding market and finished the week with sharp losses. The sector suffered seven straight days of declines before a slight recovery Thursday. The Horizons Marijuana Life Sciences exchange-traded fund fell nearly 17% this week as the S&P 500 index fell 3.9%.
More News On Marijuana Stocks
Are marijuana stocks simply too risky to buy? The correct answer is: It depends. Different investors have different financial goals. More important, different investors have different risk tolerances. Conservative investors probably won’t find much to like with most marijuana stocks because of their high risk levels and volatility. However, aggressive investors might be comfortable buying some marijuana stocks.
Regardless of what type of investor you are, understanding the risks of any stock before you buy it is critical. What are the risks of investing in marijuana stocks? Here’s what you need to know before buying. The basics about marijuana and the cannabis industry
To understand the risks associated with marijuana stocks, it’s important to first know something about marijuana itself and the cannabis industry.
Marijuana is the common name used for the cannabis sativa plant. This plant includes well over 100 chemical ingredients known as cannabinoids. Two of the most important cannabinoids are delta-9 tetrahydrocannabinol (THC) and cannabidiol (CBD). THC is the primary psychoactive ingredient in marijuana. CBD isn’t psychoactive and has been found to possess definitive therapeutic benefits in treating forms of epilepsy and could help in other ways, such as relieving anxiety and insomnia and helping reduce inflammation.
A wide variety of products can be made from marijuana. Key types of marijuana products include cannabis flower, oils (including CBD), edibles (including cannabis-infused beverages), and concentrates for vaping. Generally speaking, marijuana products are used for either medical or recreational purposes. Medical marijuana has been legalized in several countries around the world, including Australia, Canada, Germany, and the United Kingdom. Thirty U.S. states have also legalized medical marijuana, although marijuana remains illegal at the federal level in the United States.
Only two countries currently allow the legalized use of recreational marijuana — Canada and Uruguay. Support among Americans for legalizing marijuana for recreational use is at an all-time high. Nine U.S. states plus the District of Columbia have legalized recreational marijuana so far, with others potentially on the way to doing so.
A large industry has emerged in recent years as more countries and U.S. states legalized medical marijuana. Many of the companies supporting the medical marijuana market have also expanded into the recreational marijuana markets in states including California and Colorado, as well as in Canada.
Marijuana growers: Probably the most straightforward way of investing in marijuana stocks is to buy shares of a marijuana grower. Canopy Growth ranks as one of the top Canadian marijuana growers. The company is a licensed producer for the medical and recreational marijuana markets in Canada. In addition, Canopy has operations in several other countries that allow medical marijuana, notably including Germany, which claims the largest marijuana market outside North America.