Edible sales could miss government's target: Bill Blair
Marijuana edibles may not hit store shelves as soon as Canada’s government makes them legal, as provinces will need time to prepare for sales, Justin Trudeau’s pot czar says.
Trudeau’s government has said edibles and other products currently banned will be “permitted for legal sale” no later than Oct. 17, a year after Canada began legal sales of dried cannabis for recreational use. But Bill Blair, the Trudeau cabinet minister who leads the pot file, said the federal regulations due by Oct. 17 are not the final step, suggesting actual sales could come later.
“It’s a complex area with a greater risk, because of the way in which it’s consumed,” Blair said in an interview in his Ottawa office late Monday. “We said we’re going to take the time to do it right.”
Canada became the first major economy to legalize recreational pot nationally in October, and provinces set up a patchwork of retail and online sales, beginning only with dried pot and oils. Edible pot products like candies, beverages, ice cream and baked goods will go on sale in the next phase of the market’s opening. Deloitte has estimated that six out of 10 consumers will consume pot in this form.
Edibles don’t need a new law to be passed, but the government needs to publish final regulations. Blair said he’s committed to doing that by the Oct. 17 target. But he also cited the example of the 17-week gap between the federal pot law passing last June, and the formal market opening for dry sales in October, which allowed manufacturers and retailers to be ready. Asked whether the gap between edibles being allowed and actually being sold could be weeks or even months, he declined to say.
Once the regulations take shape, the federal government will work with provinces “to determine an appropriate process of implementation, and I don’t have the dates for that,” he said. “Those are conversations that I think we’ll begin more appropriately as we get further along in the development of the regulatory framework that’ll control edibles.”
Canada’s health department began a public consultation on cannabis edibles, extracts and topicals last month, and says those products will be “permitted for legal sale’’ no later than Oct. 17. The regulations could kick in sooner than that, as Canada has a federal election scheduled for Oct. 21.
Once they kick in, companies need to give government written notice at least 60 days before selling a new cannabis product -- meaning, sales could be pushed at least to December if regulations kick in for October. It’s unclear whether the talks with provinces could extend the kick-off date for sales.
Keith Merker, chief executive officer of WeedMD Inc., said provincial agencies have indicated in talks that they’re expecting to be making product calls to fill distribution centers as early as the next few months in preparation for October.
“The reality is, I’m not sure how many companies are truly ready to start shipping any of these things, especially given that the regulations aren’t even certain yet,” Merker said. “It’s classic cannabis industry stuff, you’re operating in this mist of uncertainty and trying to make business decisions that are appropriate.”
Canada’s government released pot sector statistics on Monday, showing a 4 per cent rise in sales of dried cannabis in December. The data showed a 12 per cent increase in “unfinished inventory” of dried cannabis and a 4 percent decline in "finished inventory,” suggesting there’s a backlog getting pot to consumers.
“I don’t think there’s a problem with the supply, but we still have work to do on the supply chain,” Blair said. He added some provinces have done a good job managing supply and sales and “others are still working through that process,” praising Atlantic Canada’s rollout.
If all existing licensees were producing their full allowable amount, that would total 800,000 kilograms a year, “which we believe quite adequately services the existing demand for all cannabis in this country,” Blair said. While companies aren’t currently producing at that full level, “there is already sufficient production capacity in this country.”
The government has a backlog of license applications to consider, and Blair said it won’t cap the number of licenses. “The market will determine, and so as long as people meet the high rigorous standards, they can apply for and obtain a license.”
Blair struck a broadly optimistic tone about the market. “This is really a process. It wasn’t that we were going to throw on the switch and everything was going to change overnight,” he said. “We’re building it up, building it out carefully.”
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