After the initial boom of legalization day in October of 2018, the Canadian cannabis industry has seen significant cooling due to a consistent lack of supply to meet consumer demand.

Industry insiders expect that shortage to continue over the next year as communities struggle to get enough licensed retailers up and running.

National Access Cannabis Corp Chief Executive Officer Mark Goliger discussed the issue on a televised BNN Bloomberg interview this week, describing a consistent lack of product in physical brick-and-mortar outlets or at online stores across the nation. Goliger commented:

We are still lacking access points to make this a robust legal market, and until we have access points that are convenient for consumers, we will still have a thriving black market.

That black market hasn’t been quashed by legalization in part due to wide variances between provinces in licensing issues.

Goliger also noted a strong disparity between pricing from legal storefronts or online outlets and illicit sales connections, commenting:

I think we will see that change in 2020 when there will be enough surplus of product to bring down the prices in the legal market.

A recent StatCan report backed up that assessment, showing that legal sources tended to charge an average of $3 more per gram than illegal sources.

While recreational marijuana usage is legal, selling without proper licensing remains illegal. Police in London, Ontario shut down three illegal pot shops on Thursday operating outside the province’s rules under the Cannabis Act.

In Ontario, legal brick-and-mortar storefronts won’t be allowed to open until April and only 25 licenses have been handed out via lottery for the entire province. More than 17,000 individuals and corporations applied for those licenses, and none of the winners were established, large-scale cannabis companies.

National Access Cannabis, for instance, operates 22 stores across the nation but was not chosen for a license. For now, the company has signed letters of intent for leases in Ontario, but can’t open any stores there during this first wave of licensing.

Even when those 25 lottery winners eventually open stores, they won’t cover the geographical area necessary to provide access to the entire province.

Essex and Kingsville don’t meet the population threshold required for a retail store under Ontario law, but both towns recently voted unanimously to allow licensed retailer suppliers to operate within city limits.

While other provinces already have retail stores, supply remains consistently low, which has spurred on a race to build new production facilities and prompted companies to acquire existing marijuana producers at a breakneck pace.