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Briefing highlights

  • What early pot numbers show
  • Markets at a glance
  • Household debt burden rises

bogart

VERB

[WITH OBJECT]

U.S.

informal

Selfishly appropriate or keep (something, especially a cannabis cigarette)

‘don’t bogart that joint, my friend’

— Oxford Living Dictionaries

Early numbers suggest there’s not enough legal pot to go around.

Health Canada figures show sales of recreational marijuana of 4,386 kilograms of the dried stuff from Oct. 17, when it became legal, to Oct. 31. The dried equivalent of cannabis oil adds 269 kg to that, according to an analysis of Health Canada’s numbers by AltaCorp Capital.

When you add in sales of medical pot, which Health Canada reported for the entire month of October, you get a sense of how much is being spent, though the recreational side is only for 15 days.

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There have been supply problems and a scarcity of retail outlets since pot became legal, and AltaCorp now doubts spending on legal cannabis this year will reach levels estimated earlier by Statistics Canada.

“As many observers expected, the ramp-up in legal sales will be a process,” AltaCorp said in its recent report.

“While the measurement period is far too short to draw any meaningful projections from, it does seem evident that initial sales have been dampened by supply shortages and lack of retail storefronts, both of which are not sufficient to keep pace with Canadians’ demand for legal cannabis.”

Ontario Cannabis Store deliveries were hurt by rotating strikes against Canada Post, while British Columbia had only one shop up and running on Oct. 17, AltaCorp noted, citing, too, supply issues in Alberta and Quebec

(Whoever would have thought that, in 1970, say, you’d be complaining that you couldn’t get a buzz because of a labour dispute at the post office, right?)

“Despite the clear strength of demand, until these supply side issues begin to resolve, we expect that legal sales may be lower than some had initially forecast,” AltaCorp said.

But fear not, entrepreneurs and big business. These are very early days.

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Indeed, in another report this week, AltaCorp looked at sales numbers in several U.S. states and projected “significant room for growth” in Canada.

“The data suggest we can expect a lift in spending per capita, as Canada’s legal market begins to ramp up in the coming months years,” AltaCorp said.

“In our view, the most significant factor contributing to the increased spending per capita observed in mature legal markets is the greater market share occupied by higher-margin derivative products, such as edibles, extracts and beverages,” it added.

“These products typically sell for a significant premium versus dried flower on a per-serving basis.”

Thus, certain businesses are poised to benefit when other products, such as edibles, become legal, which is expected to start next fall.

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