MONCTON, NB, Dec. 7, 2018 - In the month since the legalization of adult use recreational cannabis in Canada, we’ve seen much of what we’ve expected: significant customer demand, inventory shortages, complaints from the illicit market, environmental concerns about packaging, and dramatic differences in the ability to deliver on supply obligations among licensed producers (LPs).
There have also been a few notable surprises along the way including:
Demand: Canadians have been consistent in their support for the legalization of cannabis. And while we knew there would be tremendous interest in the product, we seem to be experiencing a moment of exceptional excitement and curiosity. While the initial green rush will normalize over time, right now producers, retailers and other distributors are all running to keep up. But how did we launch a brand new industry and not have enough product to go around?
One thing to consider is that the process to become a licensed producer is a long and arduous one. When discussing production and capacity, we often overlook what it takes to not only secure a license but to reliably produce high quality product at any reasonable scale. Likewise, it is becoming increasingly obvious that only a small number of LPs will be able to deliver what they have promised; that will have an impact on product availability going forward.
Diversity of consumer base: Since October 17th, I have stood in lines with cannabis customers in several different provinces and have been delighted by the immensely diverse customer base. Thinking ahead to the 2019 launch of cannabis edibles and beverages, it means exciting days for product development. Given the breadth of consumer interests and tastes, we can imagine rich and imaginative product lines inspired by that diversity.
Impressiveness of the retail environment: Public and private retailers have developed tremendous retail environments with well-trained staff focused on the consumer experience. Most provinces have played to their strengths, offering consumers the benefit of their experience and expertise in alcohol-related education, distribution and sales. The quality of that training is reflected in the positive experiences customers are having from coast-to-coast. In our backyard, we’ve heard stories about the competence and preparedness of staff across the Maritimes, as well as positive feedback on the environments developed by retailers such as Fire & Flower and Tokyo Smoke. It appears as though retailers have done a great job recruiting and have embraced the talent and resources that existed previously in grey-market retail.
Consumer embrace of CBD: Canadian consumers are not only receptive to, but surprisingly well educated about, the benefits of cannabidiol (CBD). This initial positive demand for CBD, which has no psychoactive effect, suggests that consumers have embraced the idea of cannabis as it relates to overall wellness. While medical patients have long since discovered the potential benefits of CBD, we didn’t anticipate how that awareness would translate into the recreational market. Consumer demand for CBD is an encouraging indicator of the effectiveness of ongoing educational efforts and a growing understanding of, and expanding experience with, cannabis products.
LP marketing practices: Marketing strategies continue to suffer from a lack of clarity from Health Canada. In many instances, licensed producers continue marketing as they see fit, often without discipline or guidance. We often find the worst offenders in the realm of social media, promoting products from a lifestyle perspective that is unquestionably non-compliant. Still more direction is required to ensure industry compliance with marketing standards. We continue to need rules that are clear and enforceable.
Medical patients: Post-legalization, many medical cannabis patients have found the cupboards are bare. It is disappointing to see the number of companies that have prioritized their commitments to the recreational market over medical patients who rely on them.
At Organigram, our inventory for medical customers is as well-stocked as it was before legalization and our commitment to ensuring medical access remains steadfast. We have also committed to paying the $1/gram excise tax levied on medical cannabis products, to help ensure no patient is left behind. Our hope is that this concern is a temporary one, and that commitments are met to the hundreds of thousands of medical patients who rely on the LP community for their medicine.
This monumental first 30 days should bolster Canadians’ faith in the product and the process.
Success over the long term will be attributable to solid business fundamentals as well as a continuous process of innovation and exceptional client service.
Call 1-844-644-4726 (1-844-OGI-GRAM) and the folks on our client support team like Nicole, Bhreagh and Jastine can answer any question you have.
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