Health Canada: Cannabis Market Data, March 2018
Health Canada reported its market data for cannabis for the period ended March 31, 2018. The growth in the number of registered medical cannabis patients is of interest. At the end of March, there were 296,702 registered users – a healthy increase of 177% over a year earlier.
As the chart to the left shows, the number of registered patients continued to climb in the latest quarter while the chart to the right shows the year-over-year rate of increase decelerated for the fifth quarter in succession. This slowdown is as expected given the spectacular increase in the number of patients since the quarter ended June 2014. The slower rate of growth is likely to continue in the quarters ahead.
The other interesting statistic is the change in the level of inventories held by Licensed Producers (LPs). By the beginning of this year, LPs were increasing production and inventories in anticipation of the opening up of the recreational market. As the chart to the left shows, the amount held in inventory of dried cannabis stood at 44,179 kilograms at the end of March 2018, slightly more than double a year ago. Inventory of oils was at 14,623 kilograms close to triple the level of a year ago. The more rapid buildup in oils continues a well-established trend in the market.
The data was four months old when it was published but it seems to indicate that at the original July target date there would have been shortages and upward pressure on prices. Unless something unexpected happens, the delay of having dispensaries open on October 17, 2018 will not change that situation materially. In these circumstances, the underground suppliers will probably continue to flourish. But the newly licensed and opened dispensaries will have to be very cautious.
Selling unauthorized product means they are running the risk of having licenses suspended or revoked for a short term profit opportunity. Licensed dispensaries taking a longer term view will only offer product from legitimate sources.