With high taxes, a saturated market and few options, some of Canada’s legal cannabis producers are struggling.
Maybe I don’t get the nuances, but isn’t this just the free market?
It gets legalized, tons of shops open up. Turns out after the initial rush it’s not very profitable to have half a dozen shops in the same town? Everyone competes, lowers their prices, some shops have to close (the ones with the worst locations). Duh?
Exactly. You shouldn’t get a bail-out because your risky investment failed.
Yeah!
We only do that for airlines. And oil. And housing.
Gotta help out the little guys!
Don’t forget cable/internet/cellular companies.
& Robellus
Or because you are fighting to keep the cost of your moldy shitty weed sky high, behind the thin veil of government protection, from a free market that can kick your ass at half the cost, to the benefit of the consumers?
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Yup. Just like any new market/product. A pile of people rush in, a pile fail, and the rest consolidate into a few well established players and dominate the market.
In a previous career, I was involved in salmon aquaculture in the Bay of Fundy. When I first got in, along with dozens of other companies, we were getting $8.50/lb at the farm. Five years later, we were struggling to get $2.50/lb, which wasn’t enough to cover production costs. Thirty years later, there’s basically one company dominating in the area. Profitability is still dodgy.
StatsCan has been doing a fair amount of surveying on cannabis in general. They found that 69% (nice) of users buy from legal storefronts or legal websites. Another 25% was home-grown, or from friends/family. The remaining 6% was from dealers or illegal shops/websites.
Yes, it’s how things are supposed to go
Except black market is still cheaper and has more options, so by that logic all the legitimate shops will end up closing.
black market
That’s all you needed to say. A black market fundamentally cannot exist in a free market. A black market is only able to emerge beside a regulated market as ignoring regulations is what sets a black market apart from other markets.
No. A big reason why you see 10 pot shots on every street corner is because the shops needed to be licensed, and the licensure was a closed process. In other words, the government left it a secret as to whether or not your neighbour was going to also open a shop.
If you could have seen that your neighbour was opening a shop, as you could in a free market, chances are you would back away and find somewhere else before you sunk much into it. But the lack of a free market left people to guess – and many guessed wrong, only finding out after they were long into the process of running the business. At that point, you may as well try.
There is nothing free market about cannabis in Canada. It is regulated to the max.
Yes. But the greedy business venture folks thought all that prohibition-profit could be gathered with a butterfly net by legally now becoming the “dealers”.
If you read through the old white paper on the matter 5 or 6 years ago (?) put together byb the LPC. It stated that home cultivation should stay in to mitigate the government, or private industry from becoming the new “dealers”. They likened it to the home made wine industry.
This is how it was intended to roll out, more or less. Industry is just pissed because they can’t pull in $10-15 a gram on low- grade, or mids.
People want weed grown with care. It makes all the difference.
Also, they made it all about THC content. …it’s not about that. You can get seriously fucked up on 15% THC with good terpenes, and a short, dull high from 33% corporate junk.
…IMO.
The large producers lobbied the government to protect their investments by writing a regulatory framework that kept small, air and sunshine producers out of the market. Their indoor, monoculture product is often contaminated with mold or illegal pesticides and is of low quality. That means that the majority of people still get their pot products through the black market.
They shot themselves in the foot and are now whining about it. Maybe when they’re all bankrupt the government will pull their heads out of their asses and write a realistic regulatory framework. Until then, will just have to watch the large producers flounder and fail and listen to them whine.
I am buying from the same guy I began buying from in 1966. He has a fantastic product at an extremely reasonable price. If he raised his prices to what the legal market is charging I would still buy from him due to the better product. I bought one legal gram on the first day it was legal as I wanted the container.
a saturated market
There’s 16 dispensaries in my city, and that’s just the ones that show up on google maps. Add in the unlisted ones and the ones on Native land and you’re closer to 25-30 stores.
You guys are choking each other out; too many stores for anyone to have a good solid customer base, and prices are still way too high. Maybe that’ll mean I can actually buy shatter from them for less than $40/g at some point, but for now I keep buying from street dealers and Native shops. $15-20/g.
I don’t really have any sympathy here. I mean, if prices are too low, that means that either competition is too high, or the product isn’t as popular as people thought it would be.
Either way, the legalization is doing what it’s supposed to do: squeeze out illegal trade and prevent this money from reaching the hands of criminals. I bet that no back alley dealer wants to touch weed with a ten foot pole as there’s no way for them to make any real profit anymore.
I’m curious how enforcement has changed since legalization. I’m guessing that the licensed industry is struggling because the black market is still where most buyers go. That and some are poorly run businesses (looking at you Canopy).
We’re in the middle of an inflation nightmare right now, so I can understand why people are picking based on price. Weed’s not exactly a necessity and it’s gotta fit people’s budgets. I’ve *never *seen a $5 gram at a dispensary in Alberta though. The budgetest of the budget stuff is around $7 and it’s usually bone dry, tiny little half busted nugs. Basically shake.
I usually spring for the $12-15 grams when I buy flower because the product is typically higher quality and tastes better in my vaporizer. I’m admittedly not a heavy smoker - just a bowl here and there, maybe a few nights a week - so a lower price is less of a draw.
This is the best summary I could come up with:
With high taxes, a saturated market and few options, some of Canada’s legal cannabis producers are struggling.
When the federal government legalized the sale of recreational cannabis in October 2018, retail locations popped up one after another as investors and entrepreneurs dove into a new industry that was highlighted as the next big thing for the economy.
However, prices are falling and the industry is taking a hit, and licensed producers and retailers are now looking for new ways to improve their bottom line.
Taylor Giovannini, co-owner of Oceanic Releaf, a cannabis producer based in Burin with nine retail locations across Newfoundland and Labrador, says a lot of the problem is due to how the deal was initially laid out.
Chris Crosbie, chief operating officer of Atlantic Cultivation in St. John’s, said Giovannini’s concerns are widespread in the industry.
And without any changes to help the industry from the federal level, Crosbie predicts a dire future for many licensed companies across the country.
The original article contains 499 words, the summary contains 154 words. Saved 69%. I’m a bot and I’m open source!
I buy all mine from the rez. Flower is like 30% thc and they have really good edibles. No tax either
