Canada's new pot problem: A shortage in supply

Concerns the country won't meet marijuana demand once it becomes legal...

As Canada aims to become the first major country to completely legalise marijuana, fears have been raised over a supply crunch.

The North American nation has set itself a summer 2018 target to make the drug lawfully available for medical and recreational use.

That doesn't mean, however, that it's certain everyone will immediately be able to avail of their new freedom and blaze up.

Ontario finance minister Charles Sousa said during a meeting of finance ministers last week:

"Ultimately, the biggest problem that appears after today's discussion is one of supply, so we want to make certain that, when we do proceed, there is sufficient supply to accommodate the activity because what we're trying to do is curb the illicit use and organised crime that now exists around it."

Global Marijuana March in Toronto, Ontario last month. Picture by: Johnny De Franco/Zuma Press/PA Images

Action is already being taken to address the demand for medicinal users, with Health Canada streamlining its approval process for growers as medical user registrations tripled to 167,754 over the last year.

Grower Organigram is just one example of the ramp-up in production of the plant as it raises its capacity, according to QZ, from 6,000 kilograms to 26,000 kg annually by 2018.

A number of analysts believe the efforts will be in vein when it comes to hitting that July deadline next year. 

Cam Mingay, a senior partner at Canadian corporate law firm Cassels Brock, told Bloomberg:

"I don't know what anyone can do about it – you can't force the plants to grow faster. You could approve 50 more tomorrow, and realistically they could probably be in production by the end of 2018 in any meaningful capacity."

Justin Trudeau's government has publicly sold the legalisation primarily as a means of keeping pot out of the hands of kids and dragging it out of the black market; a shortfall in supply for a period would only serve to encourage continued illicit activity.

Financial analyst Jason Zandberg also told Bloomberg that he was concerned that the initial shortage could be used as an excuse to push the recreational legalisation date back, and that if it slipped into the next election cycle it might not happen at all.

Canaccord Genuity Group estimated last November that the Canadian marijuana industry could be worth as much as C$6 billion (€4.05bn) annually by 2021, with demand reaching 575,000 kg per year.