Despite the increase in sales, many of Canada’s cannabis producers are sitting on unused product, and some have even been forced to shutter facilities and lay off staff. According to a recent CBC article, cannabis production was in overdrive prior to the legalization of recreational marijuana. As a result, the industry overall has about seven months’ worth of inventory just sitting around, when a typical supply chain only requires two months’ worth of inventory in reserve.<\/p>\n

While retail shops in the province are privately owned, the Ontario government is deeply entrenched in the retail model. Not only are licencing fees paid to the province, but the Ontario government also acts as a wholesaler for all legally-sold cannabis. The province buys the product directly from producers like Canopy, and then sells it to private retailers. This gives significant control over pricing to the government, ensuring that the prices in the private shops remain in line with the prices on the government-run online retail shop, the Ontario Cannabis Store.<\/p>\n