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Canadian producers own too much cannabis in stock

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A significant drop in prices is expected to allow a reduction of cannabis reserves.

Canadian cannabis producers and processors are sitting on a massive stockpile of raw stocks that is growing so fast that some analysts fear it will precipitate a price meltdown in the nascent industry.

Since January 2019, the amount of dried cannabis in stock has almost tripled, reaching the staggering figure of 328000 kg at the end of August. According to Health Canada data, this figure is comparable to the 118000 kg counted eight months earlier.

Health Canada defines gross stock as the quantity of cannabis held in stock by a "grower or processor who is not packaged, labeled and ready for sale". It defines finished product inventories at 60872 kg at the end of August as ready-to-sell products in the warehouses of provincial wholesalers and licensed producers.

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With dried flower sales reaching only 13000 kg in August, total stocks held by Health Canada were close to 30 times the industry's monthly sales rate.

source: business.financialpost.com

Tags : Agriculture / GrowCanadaExtraction