While the cannabis industry saw a boom with the arrival of legalization last October, some companies are quickly experiencing more of a bust due to ongoing supply, licensing, and pricing issues.
Puff Puff Pass — a private retailer in Clarenville, Newfoundland — is shuttering today amid a declining customer base as the store struggles to keep shelves stocked.
According to a SooToday report, the management at Puff Puff Pass squarely put the blame for their closure on overly restrictive provincial rules on where the store was allowed to acquire product and what quantities it was allowed to purchase.
Puff Puff Pass manager Tina Greening told SooToday:
Choices for retail outlets have also been culled recently when stores operate outside the bounds of the Cannabis Act or the Access to Cannabis for Medical Purposes Regulations.
That issue was highlighted in Ontario this week, where legal product can only be bought through the government-run Ontario Cannabis Store.
Hamilton-based dispensary Georgia Peach shuttered all physical locations in a brief announcement via social media, stating orders could only be placed online or for delivery going forward.
According to a Global News report, 25 George Peach employees were arrested the day before that announcement.
Despite those closures and arrests, more than a dozen non-authorized retailers are currently estimated to still be operating in Hamilton according to Deputy Police Chief Dan Kinsella.
Georgia Peach isn’t the only company to experience problems for breaking legal regulations. Winnipeg company Bonify stopped all sales and production while an investigation is underway into senior members of management acquiring non-licensed cannabis to pass off as legal supply.
While the federal government issued assurances as late as mid-October that legal supply would be able to meet customer demand, a lack of product on shelves has been a consistent complaint across the country.
The government doubled down on those claims as recently as yesterday in a series of tweets from Minister of Border Security and Organized Crime Reduction Bill Blair. The MP posted this message on Twitter:
While supply has increased as companies construct new cultivation facilities, pricing has been another hurdle to the industry.
According to a StatCan report on cannabis purchasing habits, legal suppliers tend to charge more than illegal outlets, which is an issue that is expected to continue throughout the year while companies scramble to produce additional supply.
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