Behind every booming industry are the workers and artisans who make it all possible. In Canada, both small and large-scale farmers work tirelessly to supply high-quality cannabis to consumers. However, these farmers often get overlooked in favor of flashy startups or apps that help bring your cannabis purchase directly to your door.
So today, we’d like to take a closer look at the hardworking farmers of the Canadian cannabis industry. In particular, we will highlight the impact of domestic farming on the Canadian cannabis industry as a whole. But first, let’s identify a few important metrics concerning domestically grown cannabis.
How Much of Canadian Cannabis Comes From Domestic Farmers?
Since recreational cannabis is not yet legal throughout much of the world, it isn’t always easy or cost-effective to import cannabis at the macro-scale. Additionally, supporting local growers helps promote job growth and stimulate the domestic cannabis market. That said, multiple reports indicate that Canada has experienced a shortage of available cannabis in certain territories in the past, which could have led to an increase in imported products for the future.
Thankfully, this shortage seems to be coming to an end, as Canadian farmers ramp up production and licensed producers prepare to meet the increasing consumer demand for edible products. However, whether Canada is currently experiencing a cannabis shortage, surplus, or neither has been up for debate among analysts since legalization last year. In any case, the cannabis that is hitting the shelves in Canada is coming from somewhere, but is it all domestic product?
Regulatory Limitations on Cannabis Imports and Exports
According to Health Canada, the following regulations apply to the import and export of cannabis in Canada:
The import and export provisions for cannabis operate in the context of Canada’s international drug treaty obligations. Health Canada has an obligation to maintain control over the movement of cannabis in a manner consistent with these international drug control conventions which strictly limit trade in cannabis to medical and scientific purposes between countries within the International Narcotics Control Board’s confirmed estimates.
While Health Canada can and does issue licenses for the import and export of cannabis, there are not yet any reports on the number of licensed importers/exporters, or the quantity of cannabis that has moved in and out of the country. As a result, it is impossible to provide precise data related to Canada’s domestic vs. foreign cannabis.
Nonetheless, Health Canada’s regulations give us an idea of how much cannabis is being moved across Canadian borders. Limiting imports and exports to medical cannabis or cannabis used for scientific research puts a lot of constraints on the amount of product moving into the country. As a result, we can analyze existing data about cannabis users and sales to better understand where the cannabis is sourced.
Medical vs. Recreational Cannabis Data
Nearly 1 in 5 Canadians intended to use cannabis within three months according to a CBC report published in February of this year. Data collected by Statista shows that nearly half of Canadian adults have reported using recreational cannabis at least once in their lives. Though these numbers do not prove anything concretely, they do point to the fact that a significant portion of the Canadian population has either consumed or plans to consume recreational cannabis.
A deeper look at sales numbers also shows the ratio of medical to recreational cannabis in Canada:
Health Canada: Finished Inventories and Sales (Dried Cannabis), October 2018 – July 2019
As you can see in the chart above, cannabis sales have steadily increased since legalization last October. However, medical sales have remained somewhat stagnant, with a low of 1,535 kilos and a high of 2,129 kilos (per month). Alternatively, recreational sales more than doubled in the same timespan, from 4,405 kilos in October of 2018 to 9,747 in July of 2019.
It is important to note that cannabis oil sales are much higher among medical cannabis users than non-medical users. Nonetheless, medical cannabis sales have remained stagnant in this category as well. You can see this lack of growth in the chart below:
Health Canada: Finished Inventories and Sales (Cannabis Oil), October 2018 – July 2019
Sales of medical cannabis oil have consistently fallen between 4,296 and 5,688 litres. While recreational sales of cannabis oil started much lower at 1,708 litres per month, they have grown every month since then, reaching 5,558 litres in July of 2019. This is primarily due to the fact that medical cannabis has been legal in Canada since 2001, so legalization of recreational cannabis had virtually no effect on medical sales.
What Does This Data Show?
Since cannabis can only be imported for medical or scientific research purposes, this means that cannabis imports are very limited when compared to the totality of cannabis sales and consumption in Canada. Recreational dried cannabis outsells the medical equivalent nearly 6:1, while recreational sales of cannabis oil are nearly 30% higher than medical sales. In both cases, the gap seems bound to widen with time and the introduction of cannabis edibles into the marketplace.
So, what does this all mean? Even if Canada sourced all of its medical cannabis from outside of the country (which is both highly unlikely and impractical), foreign products would only account for about 38% of cannabis sales, and less than 4% of the country’s total finished inventory. This means that Canadian farmers and licensed producers are providing the vast majority of cannabis in Canada, and imports make up only a small fraction of the country’s supply.
The Role of Canadian Cannabis Farmers
As the data shows, Canadian farmers are providing the country with a lion’s share of its cannabis inventory. In the first weeks and months following legalization, many questioned the efficiency of Canadian cannabis farms, as demand far outweighed supply. However, the shortage was primarily due to the government’s decidedly slow implementation of cannabis regulations.
In the months that followed, cannabis farmers across the country proved that they were up to the challenge. Now, Canadian cannabis inventory is at an all-time high, and licensed producers and retailers are set to make record profits in 2020. Part of this inventory ramp up was in preparation for October 17th, the date set in the Cannabis Act to officially legalize cannabis edibles.
Currently, licensed producers and growers all over Canada are opening new job listings for experienced farmers. Traditionally, providers of medical cannabis have not needed to meet such high demands for product. Now that demand is much higher, new licensed producers for both medical and recreational cannabis are opening the door for thousands of skilled workers.
This growth has also given hope to smaller farmers who have been overtaken by larger producers. Farmers with knowledge and cultivation experience have the opportunity to transition into cannabis production, thanks to an ever-growing domestic market. As a result, now is the time to become a licensed producer in Canada.
Learn More About Canadian Cannabis Licensing
Are you interested in becoming a cannabis farmer or licensed producer in Canada? At Cannabis License Experts, we provide you with the guidance to plan your business, acquire funding, navigate the legal requirements, and acquire the right license for your business. To learn more about starting or expanding your cannabis business, as well as becoming a licensed producer, consult the experts at CLE today.