Canada is gearing up for legal recreational marijuana sales in less than ten days and according to a study, the producers will not be able to keep up with the demand.
A new study, reported by both CP24 and Bloomberg, predicts that legal supply of marijuana in Canada is set to meet only 30% to 60% of consumer demand.
Researchers from Toronto-based C.D. Howe Institute and the University of Waterloo claim that legal supply will rise from about 146.13 tonnes to roughly 210 tonnes a year after Canada legalizes marijuana next week. Demand on the other hand is expected to be around 610.6 tonnes.
“There will not be enough legal supply, especially during the first half of the year following legalization, primarily because of the slow rate of licensing producers,” said Anindya Sen at the University of Waterloo and Rosalie Wyonch at C.D. Howe in the report. The report is set to be published next week.
The authors noted, “There is also a possibility of legal supply meeting legal demand simply because many consumers choose the black market as their source of supply. Our results show that both pricing and supply shortages will contribute to maintaining the black market. Resulting in lost tax revenues and a continued need to spend significant resources on law enforcement activities related to the market.”