Canada is facing a weed shortage, and it’s not going away any time soon


canada weed

When it comes to marijuana laws, Canada is light years ahead of the United States. As some states in America struggle to set up their medical marijuana programs, our friends in the north set up a system for country-wide medical weed facilities. By next year, the country will allow recreational use of cannabis. Try comparing that to the few states with legal weed laws!

Yet with new permissions comes new users/patients, and lots of them. Demand for medical cannabis is now so massive that it exceeds the existing supply. Though growers and weed companies are pulling out all the stops to meet the insatiable demand from medical and eventually recreational consumers, they can’t seem to meet the surge in cannabis usage. Not only does this have major consequences for consumers, but weed-based businesses are also feeling the burn — and struggling to keep up.

Canada is facing a weed drought.

There are 167,754 medical marijuana patients in Canada. This number is more than three times higher than the number of medical users last year. Medical marijuana growers and providers could not keep up with demand before the massive increase in consumers. Now that demand is way up, growers, distributors, and dispensaries are having a hard time meeting patients’ needs. When recreational weed becomes legal next year, the thousands of new users and dispensaries will also face a shortage of product.

What does this mean for Canadian cannabis consumers?

Low supply and high demand means increased prices. This makes cannabis more expensive for current medical users. When recreational weed becomes legal, prices will be high, as the current expected crop yield still won’t meet the insatiable demand. Yet these users would likely accept the higher prices, as it means buying from legitimate sources and not worrying about breaking the law.

What does this mean for Canadian cannabis companies?

Growers will have to increase their crop yield to meet the demand. Doing so requires more money, space, and resources, something some cannabis growers might not have. For companies making products for growhouses, this means an increase in demand for devices that aid or automate growing cannabis plants, increasing their revenue and helping their bottom line.

Medical shops (and eventually recreational shops) will charge higher-than-normal prices, more than your average street dealer. This would make premium, cannabis-derived products like edibles and tinctures more expensive to make. Stores often rely on these products to make a profit, and increasing their prices could drive customers to buy regular ol’ weed.

 

Can you invest in Canadian cannabis?

Absolutely! Canopy Growth ($WEED) is a medical marijuana company based out of Smith Falls, Ontario. They produce tons of cannabis for Canada and other countries, as well as cannabis-based products for shops. Like Canopy, Organigram Holdings ($OGI) also legally grows weed in Canada, and is a major supplier of medical cannabis to the country. Both publicly-traded suppliers are increasing their crop yield thanks to increased demand, which means a boost in business down the line.

There’s also $HMMJ, the medical marijuana ETF. This fund owns numerous cannabis companies, most of which are based in Canada. It’s worth noting that some of these companies do not trade on an official exchange and instead trade on the penny stock market.

Before you even think of investing in a cannabis company, make sure you do your research. Understanding the risks of the cannabis market and how it ties to news and political events is key. If you don’t know what you’re getting into, your finances could go up in smoke.


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