Greenhouses Gearing Up to Drive Down Cannabis Supply Shortages

Formerly blank labels are now plenty detailed with product descriptions, bar codes and other particulars at retailers and dispensaries now that recreational marijuana is legal for purchase throughout Canada. What’s proving to be hard to come by is the product itself due to intense demand.

However, in a bid to increase supply and take advantage of buyer interest, it’s out with the old and in with the new, as agricultural aficionados and growers are swapping out some of their former crops with marijuana plants.

Growers are replacing them with tens of thousands of cannabis plants.

The uptick in cannabis farming is particularly plentiful in British Columbia, according to USA Today. In lieu of tomatoes, peppers, carrots and other vegetables, growers are replacing them with tens of thousands of cannabis plants, primarily grown in greenhouses, which lock in the heat and moisture that help to spur growth.

Rob Hill, chief financial officer at Emerald Health Therapeutics, said the move makes good business sense for the company.

“We haven’t changed the footprint,” Hill told USA Today. “We’ve just changed the crop.”

Shortages Worst in Eastern Canada

Recreational use of cannabis was officially legalized as of Oct. 17 in all 10 provinces, although it’s only available online in Ontario for the time being. Since then, supply shortages have emerged throughout much of Canada, the most severe occurring in New Brunswick, Quebec and Ontario – the country’s most-populated province.

Trevor Tobin, who along with his mother launched a cannabis retail shop in New Brunswick a short while ago, told The New York Times that they’re experiencing difficulties with keeping store shelves sufficiently stocked.

“We need more weed,” Tobin exclaimed. “It is the law of supply and demand.”

He went on to explain that his suppliers, evidently, not only didn’t grow enough product, but are running out of packaging equipment and agricultural labels for shipment.

Although it may not happen right away, more greenhouses filling up with cannabis plants should resolve the shortage situation. Indeed, Emerald Health Therapeutics has partnered with Village Farms – one of the largest greenhouse produce growers in both Canada and the U.S. – in the hopes of harvesting 82 tons of marijuana per year, all within a greenhouse that spans 1.1 million square feet in the city of Delta, USA Today reported.

In so doing, in addition to satisfying robust consumer demand, increased availability may help counteract the black market for cannabis, as illegal dealers have sought to take advantage of the shortfall by manipulating their product price points, according to The New York Times.

Government Dragging Feet On Sales Licences

While high demand and low supply is not necessarily unusual in retail settings, many people believe that this issue could have been avoided, as the government has been slow to provide producers with the necessary certification. Thus far, only 78 of the 132 producers approved by the government of Canada have received sales licences, the Times reported, based on figures available through Health Canada.

Mathieu Gaudreault, spokesperson for Quebec’s cannabis agency, told the paper that becoming only the second country in the world to legally sell recreational marijuana nationwide was bound to result in issues in the early going.

“We are building a new legal industry that wasn’t there three weeks ago, and we knew there would be problems,” Gaudreault explained. “Producers can add more people to try and meet demand, but that won’t make the plants grow any faster.”

Meanwhile, regulators are confident that producers will be able to get out ahead of demand in the not-too-distant future. As a result, plentiful supply should help oust black market dealers who inflate prices and keep illegal cannabis in the supply chain, according to USA Today.