capacity of big three 926,000 kg estimated demand Canopy GrowthAurora CannabisAphriaAll LPs combined
total inventory,
June, 2018
plant growth
Is there enough legal cannabis to meet demand? Here’s what the numbers say.
0 kg
926000 kg
636700 kg
Bottleneck
Roughly 1 in 21 applications to become a licensed producer are getting through the process with Health Canada.
0
2096
1040
231
Fourteen more producers have been licensed since the summer, and are working to increase their production capacity to meet the expected demand.
Combined, the three largest licensed producers (LPs) are expected to exceed demand in the future, through a mix of new and expanding facilities, acquisitions and stabilized plant growth.
However, the amount of cannabis* they say they’ve produced in the last fiscal year paints a more realistic picture.
Until production increases, just how much runway the stockpiles provide producers remains unclear. Will consumers deplete reserves, or will new production have the chance to make up the gap between supply and estimated demand?
Licensed producers will be supplying cannabis to provinces, or directly to retailers in a few cases, after Oct. 17 with a combination of new harvest, current inventory and product purchased from other LPs, all to meet the terms outlined in agreements they have signed with each other.
Some of these agreements are memorandums of understanding, others are more informal and will adapt to buyer habits. In Saskatchewan, select LPs have been qualified by the province but retailers and wholesalers are to set up their own agreements.
These are largely for initial orders of product, though some are for multiyear supply deals. Not all have been announced to the public, but the ones that have range anywhere from 500 to 62,000 kg per province.
It is unknown how quickly these agreements will be renewed, or in what quantity, but some licensed producers are already announcing shortages based on them. Ultimately, they are in a holding pattern until the public starts buying from stores and online retailers.
So the shelves get filled up. Now the question is, how long till they need more?
Some licensed producers have held back product in preparation for increased demand.
But the total inventory of dried cannabis and cannabis oil among all licensed producers - whether it’s intended for sale, approved for sale or held as samples - is not a significant stockpile.
More than 100 days have passed since this tally so it has likely increased, but new growth takes time.
It takes nine to 16 weeks from the planting of trimmings to the harvest of full-grown plants.
And another 10 weeks are required to dry, test for quality and package cannabis. From seed to sale, the process takes roughly 175 days.
New greenhouses and indoor-grow facilities have a multitude of factors slowing production, including construction schedules, licensing restrictions and the time it takes to populate canopy space with new plants.
Aurora Sky, outside Edmonton, is one of Aurora Cannabis’ newest facilities. It broke ground in 2017 and received a licence to cultivate this January.
Construction is near complete and, as of legalization, the facility is operating at a fraction of capacity.
This is 34,000 square feet of canopy space at Sky. It is one of five fully populated grow rooms out of a projected 17. Cultivation licenses need to be amended for each new room that is populated.
A room will be harvested every three days once the facility is full of plants. Automated cranes and conveyor belts move plant trays to the processing side of the facility. Currently, all harvests since January are stockpiled until the facility receives a federal sales license.
This is probably one of the most cool experiments ever conducted on society - what happens when prohibition ends and what on-ramps do people prefer? Everybody acts like they know, but I can tell you, I believe that is untrue.