Manitoba won't have enough cannabis to meet demand, distributor says

There will not be enough recreational cannabis to meet the demand in Manitoba — and the shortage could last for months, the provincial cannabis distributor is warning.

Manitoba Liquor and Lotteries confirmed Monday that provincial brick-and-mortar stores and their companion online websites will receive "substantially less cannabis than originally requested" to sell for Oct. 17.

The looming shortage could last as long as six months, spokesperson Susan Harrison cautioned.

"As with the start-up of any new industry, there are a number of contributing factors to shortages, not the least of which is the volume of orders and quantities of cannabis requested across the country."

She said the sheer volume of requests has put a strain on licenced producers who are tasked with supplying retailers nationwide.

Manitoba will not be the only province left wanting, Harrison said.

I don't think people should be surprised if there's a shortage at the outset.- Elizabeth Stephenson, LGCA

"We continue to closely monitor the situation and are working with retailers to co-ordinate product supply."

Manitoba Liquor and Lotteries did not disclose the quantities of cannabis it requested, nor how many of those orders have been satisfied.

The Crown agency has agreements with 15 companies to supply pot over the next 12 months. Together, they're expected to fulfil orders for 20,835 kilograms of flower in a year, which is nearly 23 tons of product.

Four of those companies responded to interview requests from CBC News. Officials with Delta 9, Seven Oaks, United Greeneries and Canopy Growth say their companies have filled their initial orders in Manitoba.

Time crunch

Seven Oaks co-founder Grant McLeod said it was not an easy task to ensure their strains would be available on time.

They had to figure out production, packaging, distribution, insurance and excise stamps — all on their own. 

"It hasn't been easy, it's been stressful," said McLeod, originally from Winnipeg, of his Ontario-grown products. "We've demanded a lot from ourselves to make this happen and a lot of flexibility and ability to adapt and adjust on the fly."

One of the province's four chosen retailers — Delta 9 — has enough stock for opening day, but chief executive officer John Arbuthnot said he couldn't speak beyond that.

"We've done our job to make sure we have dozens of kilos and a few dozen product SKUs available for Day 1. Whether that's all consumed on Day 1 or over the first few weeks … it's really anyone's best guess at this point."

Consumers will dictate need 

While more product will continuously be shipped in, Arbuthnot said his retail outlet set to open at 827 Dakota Street is at the mercy of the market.

"A supply shortage is a little bit more complex than store shelves just being empty. It means shortages of specific products, so it's product-specific, they're regional- and store-specific," he said.

"It's kind of a wait and see. We do everything we can to prepare and Wednesday is launch day and the day we get real data for consumer purchasing patterns."

Considering the scale of product requests across the country, Elizabeth Stephenson, chief administrative officer of the Liquor, Gaming and Cannabis Authority of Manitoba, said demand is outstripping supply in this province as well. 

"I don't think people should be surprised if there's a shortage at the outset, but as I've also said, everybody's in this for the long term — they want to make sure they get their product right."

The province is using a hybrid public/private model for legal cannabis, meaning the Manitoba Liquor and Lotteries Corporation will purchase cannabis from licensed producers and deliver it, or arrange for delivery, to approved, privately operated retail cannabis stores.

As a small cannabis producer, United Greeneries didn't want to oversell what it could grow.  

"We were very cautious about the numbers that we gave to the provinces," said president Todd Dea, explaining they can grow 1,000 kilograms a year at their Vancouver Island facility. Expansion plans to build more harvest facilities are underway, he said.

"We've been getting phone calls as other producers have been challenged to get product out there, asking if we can increase ours."

Canopy Growth is confident they will have enough supply on Wednesday at its Tokyo Smoke outlets.

Beyond that, Jordan Sinclair, vice-president of communications, says it's tough to forecast the need.

"Everyone you talk to is flying blind," Sinclair said. "Nobody knows what any other producer has got, nobody knows what the demand is going to look like. It's still, I'd say, a day and a half early to figure out if there's going to be shortages or not versus anybody's expectations."

It is not known how many stores will be ready by Wednesday, but Delta 9 and Tokyo Smoke have previously said they will have at least one store open.