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Canadian cannabis shortage, bureaucratic confusion spark post-legalization reckoning

Posted on November 16th, 2018 by Global Ganja Report and tagged , , , , , , , , .

CanadaNationwide cannabis shortages since Canada went legal last month are causing some provinces to rethink their distribution plans. Alberta has just announced that retail outlets will be barred from purchasing online but must place their orders manually to prevent the computerized system from being overwhelmed. Provincial authorities are struggling to break the logjam in the supply chain, and keep enough product in stock for those who purchase either online or from brick-and-mortar outlets.

Canadian cannabis suppliers have been struggling to keep enough product in stock in the weeks since legalization hit in on Oct. 17. Now, Alberta provincial have decreed that retailers will no longer be able to order cannabis online.

Anxiety in Alberta
On Nov. 12, the Alberta Gaming, Liquor and Cannabis authority, or AGLC, informed all retailers in the province that they will have to manually order their next shipment. When cannabis went legal on Oct. 17, licensed retailers could place orders with the AGLC online—on a first-come-first-served basis. But this contributed to what Canada's Global News wryly called a "chronic shortage" in the province.

Quoted was Joshua Vera of the Elevate Cannabis outlet in Edmonton, who was pictured despondently hanging a sign on the door of his business reading "SORRY, WE'RE OUT OF STOCK." Vera described his stressful experience of the past weeks: "You're not sleeping much. When something was uploaded to the system it was a matter of literally seconds before it was gone."

Global News reported that stock was similarly exhausted or rapidly dwindling at most retailers in the Edmonton area (where Alberta's dispensaries are clustered). Meanwhile, just a few were very well-stocked—presumably, those most adept at gaming the online system. The Fire and Flower retailer indicated it had "lots" of stock at all of its outlets.

AGLC's Riaz Nejad said, "We're not aware of any bots being used, were just aware of people being online 24-seven basically, trying to order product. And some were successful in achieving that and others were unsuccessful in achieving that."
  
Under the new policy, each Monday retailers will be given 24 hours to manually fill out an order form; the AGLC then divide what product it has among them.

"I think this fair allocation of the inventory will ensure every retailer gets a fair shot at some product instead of some maybe getting more and some getting none," Nejad said.

Canada dry
The shortages have plagued provinces from British Columbia to the Maritimes. The Canadian Press reports that New Brunswick was forced to temporarily close more than half its stores, while the Quebec Cannabis Corporation (or Société Québécoise du Cannabis) has restricted its store opening hours to four days a week. Labrador's only cannabis outlet was forced to temporarily close its doors after being without any product for nearly two weeks.

Khurram Malik, CEO of Toronto-based Biome Grow Inc, said the shortages are in part due to strict regulations imposed by Health Canada on the country's 132 Licensed Producers, "The rules here are so difficult to grow cannabis...that if you're a new license holder and you've never done this before, it's going to take you a year, year-and-a-half, or two years to get any decent, consistent quality product out the door in any predictable volumes," said Malik.

Outages in Ontario
Simple bureaucratic ineptitude also seems to be playing a role here. Global News reports that Ontario's official Ombudsman has received more than 1,000 complaints about the province's online cannabis store since it opened earlier this month. Complaints have concerned delayed deliveries, poor communication with customers, and billing problems. The Ontario Cannabis Store warned on its website last week that delivery times for orders may be longer than expected due to "unbelievably high demand" and a labor action at Canada Post.

Retail stores are not expected to open in Ontario until April, with the provincial government to start reviewing license applications next month. In a bid to stop the emergence of vertical monopolies, provincial authorities just announced that retail licenses will not be issued to a company more than 9.9% owned by one or more Licensed Producers.

Industry voices have also protested this move as burdensome. The executive director of the Cannabis Council of Canada, Allan Rewak, told the Canadian Press he is "disappointed," as some LPs who have invested in retail chains may be prevented from entering the Ontario market. 

Saskatchewan showdown with First Nation
Another question concerning control of the industry has emerged in Saskatchewan, where authorities are demanding the closure of a cannabis retail outlet operating on an indigenous reserve without provincial authorization. Saskatchewan Justice Minister Don Morgan was quoted by the Canadian Broadcasting Corp: "It would be our position that somebody setting one up without a provincial license would not be legal, would not be authorized. I would urge them to stop going ahead with it."

The Muscowpetung First Nation, some 70 kilometers northeast of Regina, passed its own cannabis law by popular vote on Nov. 12—with 86% voting in favor. The Mino-Maskihki Cannabis Dispensary opened the next day. Whether it remains open may help determine what Canada's new cannabis order will look like, and establish the degree to which First Nations have sovereign power in the matter. With several of Canada's First Nations looking to legal cannabis for economic development, the case will be closely watched.

A letter from Muscowpetung chief Anthony Cappo calling on band members to vote in favor of the law stated that "as a sovereign treaty nation, Muscowpetung has the authority to regulate the use and sale of Cannabis/Hemp within our Nation."

 

Cross-post to Cannabis Now

Graphic: Perry-Castañeda Library Map Collection 

 

 

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