Weed Shortages: Inefficient Distribution Rules in Canada May Cause Problems

Now that marijuana is soon officially going to be legal for recreational use in Canada, the question of access has risen to the forefront of the legislative process. On October 17, provinces will begin selling weed, but Gizmodo reports Canadian citizens are concerned there won’t be enough supply to meet the assured demand.

One aspect of the C-45 bill that legalized federal cannabis use is that provinces have the right to specify the logistics of selling weed. In the east, Ontario and Quebec have mandated that only licensed government-run dispensaries will be allowed to operate, while in the west, British Columbia has paved the way for entrepreneurs to obtain licenses to sell pot independently.

But the application for a license to sell weed won’t be available until October 17, either. So it’s unclear how the provincial governments plan to provide enough bud, despite their assurances that there will be enough cannabis to go around.

How Will Pot Be Sold in Canada? And What About the US?

A good thing about Canada’s new ganja laws is that having a criminal record related to selling, growing, and trafficking weed won’t necessarily disqualify someone from obtaining a license to participate in the drug exchange legally. Vice reported in December that the process will be merit-based, which may relieve some fears that legal pot only benefits a privileged class of people. And there will be more information on the exact specifications of the newborn Canadian weed business announced on July 11.

Though cannabis isn’t really close to being legalized federally in the US, there are more people who live in California, where recreational weed is legal, than there are people who live in all of Canada. So while our neighbor to the north is the first to take the plunge on federal legalization, they’re not the first to grapple with supply. States like California have had to devise strategies to work around shortages and supply bottlenecks.

The issue with legalized weed distribution has everything to do with providers. LA Times reported that pot shops in California knew their inventory for medical marijuana prescriptions wouldn’t be enough to sustain the growing population of casual users. Plus, blockages along the supply chain were inevitable with a state government struggling to develop a complicated market. That only fuels the black market, thanks to its ease of transaction and seemingly never-ending supply.

Regulators have determined tight restrictions for the legal growth, sale, and distribution of pot, which leads to suffocating inefficiency. Retailers must go through distributors to get to growers, whose product has to be tested for pesticides, contaminants, and potency. The time and effort it takes to obtain a license to grow weed is a bureaucratic nightmare, resulting in only 1,900 licensed farms versus 15,000 estimated criminal growers, according to the LA Times in January.

Why Will Canada Experience Shortages?

Vice reports there are currently 80 licensed marijuana providers in Canada ahead of October, and there are hundreds more on an extensive waitlist. According to weed industry experts in the US, those providers are significantly larger and more prepared than sellers who lept onto the legal weed bandwagon following Colorado’s move to legalize recreational pot in 2012. After all, medical marijuana has been legal in Canada since 2001, and these are the same providers who have been growing ever since.

Estimates of how much weed is actually going to be ready for purchase by October range from 100,000 to 500,000 kilograms, according to Vice. That supply will have to contend with an estimated 700,000 legal partakers, and some experts think the shortages will be inevitable until 2020. Concrete data collected by Vice shows that legal providers have stockpiled over 18,000 kilograms of dry bud in storage and have ramped up production.

But even if there’s enough weed to go around, no one seems optimistic that black market transactions will die out right away, with reported predictions estimating that up to 50 percent of frequent users will still hit up their reliable plug. And that, in many ways, may be because of the way distribution will function. In provinces that aren’t planning to allow for entrepreneurs to open stores, there simply aren’t enough dispensaries for the population; in Ontario, there will be 40 government-run stores serving 14 million people, with plans for 100 more shops by 2020.

It’s clear that the path to adequately providing legal pot is paved with legislative pitfalls. As Canada prepares to become the global example of a weed-friendly country, the logistics of its lofty goals are getting trickier and more confusing as legalized weed looms on the horizon.