ARMSTRONG: Cannabis sales and supply are booming, but complications remain

Michael Armstrong, Associate Professor of Operations Research in Brock’s Goodman School of Business, wrote a piece recently published in the Globe and Mail about the challenges faced by the cannabis industry despite significant growth in sales.

Armstrong writes:

On Thursday, Health Canada released data showing strong growth in cannabis sales in May, and it appears the legal industry is finally seeing consistent increases in retail volumes. But mushrooming inventories of unfinished dry cannabis and finished cannabis oils raise questions. And surprises such as CannTrust’s unlicensed crops and Quebec’s potential restrictions on some edible products add further volatility to the sector.

Sales of medical and recreational cannabis in May totalled 19,268 kilograms. That’s 2,192 kg above sales in April, which were 1,531 kg above the March total. That long-awaited upward trend likely gave licensed producers (LPs) about 25 per cent of the Canadian marijuana market in May.

The sales growth apparently was countrywide, as shown by the corresponding Statistics Canada retail report of a week ago. Sales particularly increased in provinces with expanding store counts (British Columbia, Alberta, Saskatchewan and Ontario) or store hours (Quebec).

(Be skeptical, however, of the apparent 26-per-cent sales jump in Quebec. Statscan underestimated sales there by one-sixth in 2018′s fourth quarter and overestimated them by one-sixth in the following quarter. The agency has since pledged to improve its accuracy.)

Continue reading the full article here.

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