With most of the ten provinces struggling to receive even a fraction of pot that suppliers have promised, a shortage has left the industry in shock, and caused concerns that Canadian cannabis producers were not well structured to handle the large demand from the Canadian marketplace.
Government officials have recently stepped in, Quebec's government-controlled stores are now closed three days a week, Alberta has temporarily halted issuing new retail licenses and Ontario has said it will open only 25 stores.
As of mid-December, about 50% of products for sale in five provinces were out of stock, according to Cowen & Co. analyst Vivien Azer.
The shortage could get much worse and continue for as long as three years, warned Chuck Rifici, chief executive officer of Toronto-based Auxly Cannabis Group Inc.
"There's a lot of execution risk, people are expanding by 10, 20 times," Rifici said in an interview at an AltaCorp Capital conference in Toronto Tuesday. "Personally, I think we're at least three years out from hitting real equilibrium."