Feature Image

Growing Demand for Cannabis Prompts Canada to License 20% More Cultivators

Health Canada has awarded nine new cannabis cultivating licenses since late May in an effort to keep up with the growing demand for marijuana.

The number of licensed cannabis growers in Canada has increased by 20 percent over the past few months, according to a new report from Marijuana Business Daily. The growing demand for cannabis has prompted Health Canada to license nine more growers since late May to bring the nation’s total number of licensed producers to 54.

Canada has seen its four-year old medical marijuana industry soar as of recently, even tripling in the past year to reach 167,754 patients. Medical marijuana use is even up among veterans, who have reportedly been replacing prescription medications with cannabis.

Canadian officials had been aware that an adequate cannabis supply could become a concern, particularly with the nation slated to legalize recreational marijuana next year. It responded by speeding up its licensing approval process for interested growers and easing the backlog of applicants to boost cannabis production nationwide. Previously, becoming a licensed producer took up to three years, followed by another year to ramp up production.

Cultivators that have already obtained licenses are scrambling to increase their production capacity. Many growers are building new production facilities or expanding the square footage of already-established greenhouses.

“Having our production capacity built out is the most critical thing for me today,” Greg Engel, the CEO of one of Canada’s 54 licensed producers, told Marijuana Business Daily.

Despite the effort to avoid a lack of supply, the industry still may not be able to meet demand once the recreational marijuana market rolls out next year. According to Marijuana Business Daily, Canada’s Parliamentary Budget Office estimates that between 378,000 kilograms and Canadians will consume 1.01 million kilograms of cannabis next year before demand rises to between 403,000 kilograms and 1.1 million kilograms by 2021. Annual production capacity is expected to reach between 60,000 kilograms and 120,000 kilograms next year, far short of demand projections.

Canada’s upcoming adult use market, projected to be worth $4.5 billion by 2021, is expected to be much larger than its medical market. Market analysts have predicted that by 2021 there will be about 3.8 million legal recreational users throughout the country.

The government has said it may be willing to overlook past marijuana-related criminal records among those interested in seeking a cannabis production license, depending on the circumstances. Being able to meet the demand for legal cannabis is an important key to the government’s goal of reducing the illegal market.

Under the proposed adult use law, Canadians ages 18 years and older would be allowed to purchase and carry up to 30 grams of marijuana and grow up to four cannabis plants for their own consumption. Cannabis will likely be available for purchase strictly through online orders and mail orders for delivery.

As of now, cannabis remains classified as a Schedule II drug and the only legal way for Canadians to access it is with a prescription. You can learn more about the current cannabis laws in Canada by visiting our education page.