Canada’s unsold hashish stock is 1.1 billion grams

Canada’s unsold cannabis inventory remains near all-time highs, but the tide may show signs of easing as production declined sharply in December.

The amount of unsold dried cannabis held in stock by farmers, processors, wholesalers and retailers fell to 1.14 billion grams in December, down slightly from the previous month, according to Health Canada.

According to the latest monthly data from the Canadian government, around 96,000 kilograms of dried cannabis were produced by farmers or processors and added to their inventory in December 2020, which is close to an annual low.

The figure is 4.2% below the value of 100,237 kilograms in December 2019 and 56% below the high of 220,461 kilograms in October 2020.

The decline in December came after cannabis production exploded in the fall, largely due to outdoor yields from “Croptober” – when the fall outdoor harvest started. Federal licensees’ production in September, October and November 2020 was 42% higher than in the same period in 2019.

The December inventory of dried cannabis consisted of:

  • 1.03 million kilograms of unpackaged inventory with state-regulated cultivators or processors.
  • 53,788 kilograms of packaged inventory with federal license holders.
  • 57,381 kilograms of packaged inventory at wholesalers and retailers in the province.

Although production declined in December, total dried cannabis inventories remained at near all-time highs.

This could keep pressure on mass producers to further curb production until the supply of certain products consumers want more closely matches demand.

The massive inventory glut, viewed as largely unsaleable, has forced some large licensed manufacturers to reduce indoor and outdoor production.

48North Cannabis, headquartered in Toronto, recently ceased outdoor production in Brant County, Ontario, leading the oversupply in the broader market.

Canopy Growth, based in Smiths Falls, Ontario, closed its Saskatchewan field operation last December, along with other closings.

Aurora Cannabis, one of the producers who built a network of inefficient greenhouses across the country, has sold real estate to align its production with demand.

Despite known withdrawals from outdoor growing, some licensed manufacturers are trying to expand outdoor production.

Aurora recently announced its intention to nearly double its outdoor footprint this year by growing 40 acres of cannabis.

The licensed outdoor growing area grew to an all-time high of 67.6 million square feet in December 2020.

At the same time, licensed indoor and greenhouse space fell to an annual low of 18.7 million square feet in December 2020.

Much of the licensed space is believed to be underutilized by struggling mass producers of cannabis, as smaller companies appear to have generated some of their sales.

Canada's unsold cannabis inventory is 1.1 billion grams

The December data dump is the final monthly update from the Canadian Department of Health. Health Canada will update the data quarterly, a spokesman for Marijuana Business Daily said.

The monthly numbers also relate to inventory levels and sales of extracts and edible cannabis products.

According to Health Canada data, 1.8 million packaged units of cannabis extracts, including vape pens and softgels, were sold in December.

However, manufacturers, wholesalers and retailers had inventories of 11.5 million packaged units that month.

Around 2.3 million packaged units of cannabis food were sold in December, a record high, but inventory levels rose to over 15 million packaged units.

Canadians purchased recreational cannabis foods valued at $ 109 million Canadian dollars ($ 87 million) in 2020, the first full year they were available in the country.

Matt Lamers is the international editor of Marijuana Business Daily based out of Toronto. He can be reached at [email protected].

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