When Canada became the second country in the world to legalize cannabis after Uruguay, cannabis companies were seen as pioneers on the “green frontier”. Their stocks and fortunes skyrocketed. Suddenly they became rock stars.
Not enough weed to get around
With legalization, the lines to buy legal cannabis got longer. Eager to scatter media stories Because of product shortages, Health Canada adjusted its approval processes, prioritizing those with existing assets.
But in late 2019, the market tipped into glut, and that’s where it is today.
Big producers started growing more cannabis, outperforming their competition, lowering production costs and flooding the market with cannabis products.
Then the inevitable happened
Between January and December 2021, licensed growers were forced to destroy vast amounts of unsold product – up to a quarter of all dried cannabis produced.
While 2021 was a recordCanadian producers have continued to destroy vast amounts of cannabis each year MJBizDaily Analysis found.
Last year they broke a record 425 million grams – or 468 tons – of unsold, unpackaged dried cannabis, according to Health Canada data provided to MJBizDaily.
Why is this happening?
A theory by MJBiz Matt Lambers Possibly, the largest cannabis producers funded and built far more capacity than the industry needed after Canada’s legalization in 2018.
The most fitting sign of failure acc The walrus, could be sitting in camps across the country. At its peak in October 2020 it was approx 1.1 billion grams of harvested or processed cannabis in stock. Ninety-five percent of the inventory was not bought by retailers or wholesalers, and much of that was “considered largely unsaleable,” Lamers said, whether due to deterioration or oversupply.
Massive destruction
“Most of the largest greenhouse transactions resulted in millions of dollars in direct real estate losses and ‘balance sheet…
