According to new figures from Canada, federally licensed producers in the country are stockpiling more cannabis than ever.
As of April, Canadian cultivators and processors had stockpiled about 620,144 kilograms (1.4 million pounds) of unpackaged cannabis inventory. This is marijuana that has not been packaged for sale to consumers at the retail level.
Around 85,014 kilograms of packaged inventory was also being held in April by federal license holders, retailers and wholesalers. This is marijuana that is packaged for sale to consumers.
Craig Wiggins, managing director of market researcher TheCannalysts, said “It’s plain old supply and demand. If you cannot sell what you’re making, it starts backing up and you will eventually have to write it down or destroy it if it doesn’t sell.”
“The total addressable market is growing. There’s no question about it,” he said. “But it’s not growing to the extent that it can absorb the unsalable product, so adjustments are coming.”
The amount of space licensed to grow cannabis outdoors now outpaces indoor and greenhouse.
Brock University business professor Michael Armstrong has said, “The (production) bump next fall is probably going to be even larger (than 2019’s), so current indoor production plans should be taking into account that a surge is going to come from outdoor.”
