Inventories on cannabis oils currently 14.7 times larger than total sales: Health Canada
As Ottawa prepares to legalize edibles and concentrates later this year, Canadians interested in cannabis oils won’t have to line up for long.
A new report by Health Canada shows that—contrary to most cannabis products—the country’s supply of oils appears to be outpacing demand. While dried cannabis sales climbed 4.7 percent in June 2019 compared to the previous month, sales of cannabis oils dropped by 2.1 percent.
Because there is no outright ban on oils for vaping purposes, products are currently available, but primarily in CBD form for medicinal use. Gel capsules and oils, which are typically used for pain relief, insomnia and anxiety, are also consumed recreationally.
“They are just not selling,” said Mark Goliger, the chief executive of National Access Cannabis Corporation, a recreational cannabis retailer with 35 stores in Alberta, Saskatchewan and Manitoba.
“We have been talking to Canopy [Growth Corporation] for some time now about the issues with their oils and gel capsules. They have known for months that most of the retailers are having problems selling them.”
Health Canada’s numbers confirm this, with inventories on cannabis oils currently 14.7 times larger than total sales. And while poor sales exacerbate the issue, retailers who chose to overstock on certain products are also part of the problem.
One retail store owner in the Greater Toronto Area—who asked not to be named for fear of damaging his relationship with Canopy—told the Financial Post the company’s Tweed-branded gel capsules were among the worst-selling cannabis products in his store. He also said they overprepared. “We ordered too much of it initially because we knew it was available and we just wanted to stock our shelves.”
“Our margins are going to take a hit because I have boxes of Tweed product—oils and gelcaps—sitting in my back office.”
But there’s no need to feel anxious—the glut of supply will likely force retailers to slash prices as December’s legalization approaches and a new wave of products come online.
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