Supply issues continue in the Canadian Cannabis market and force one store to close

Published Feb 12, 2019 10:55 a.m. ET

The Puff Puff Pass Headshop is closing. It was the first privately owned cannabis store in Newfoundland and one of only six total private registered marijuana retailers in Newfoundland and Labrador. The recreational marijuana law that was passed on October 17, 2018, brought great prospects to the region. So, what happened that caused the store to close? The manager of the privately-owned weed shop cited supply issues as the reason for closing.

Suppliers in this area are only allowed to purchase from seven licensed producers that were picked by the provinces liquor commission. The suppliers provide each store with a list of products they can order and the amount they can order.

Puff Puff Pass is not alone in the supply issue that has plagued them. Owners of other private regulated cannabis stores have had the same problems. The suppliers’ problem was passed on to the retailers, no product to supply, nothing to sell, and nowhere to go to fill their orders.

This supply crunch is not isolated to Newfoundland. The concerns about supply have caused issues for government and private owned retailers across Canada.

This isn’t the only problem for managers of retail marijuana stores either. The quality of the bud for stores is not the quality that consumers are looking for. The consumers want THC levels to be higher than what the suppliers are providing. Some stores are reporting THC levels of 11%; which is not acceptable to customers who have been smoking for many years. The consensus of some of the clientele is that they will go back to purchasing black market marijuana. Some patrons adamantly state they will not purchase legal again.

Fredericton, New Brunswick has laid off sixty of its labor-force in the cannabis industry. Three months after legalization the lay-off affects mostly seasonal workers, although a few full-time and part-time employees will be affected. Twenty stores have now normalized their operations despite the supply challenges that presented themselves, and the needs of each outlet are fully understood.

Nova Scotia has not felt the same crunch as its neighbor. Nova Scotia has received the go-ahead from Health Canada for a second licensed producer which will help in supply issues. The third LP is waiting in the wing for approval from Health Canada. The 12 stores in Nova Scotia are operated by the Nova Scotia Liquor Corporation. Licensed Producers from Alberta, New Brunswick and Ontario supply the regulated stores with their product. There have been no layoffs in the Nova Scotia outlets; perhaps this could be because the province operates fewer stores.

I think the Canadian Government should take a good look at the closing of the Newfoundland Puff Puff Pass Headshop and take heed. The people of Newfoundland have been smoking for years without the aid of the government in the supplying of their herb. It’s not difficult for those same people to get black market marijuana. Most marijuana users have their ways of obtaining cannabis, and if the government can not get the issues that are plaguing the stores and suppliers across Canada fixed, I think that the black market for cannabis will continue to flourish and grow.

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