Below is the part of a weekly series of benchmarks provided by the team at Cannabis Benchmarks®.
This week’s Canada Cannabis Spot Index report examines trends in legal cannabis production capacity in Canada.
Despite a supply-demand imbalance skewed heavily to the former, licensed growing areas for both indoor/greenhouse and outdoor operations have been expanding steadily over the past year. Both have grown by about 40% over a six month period from late 2019 into 2020.
Expanding outdoor production has the potential to impact Canada’s legal cannabis market in several ways. It will undoubtedly increase supply, potentially dramatically in the autumn and winter, after seasonal harvests. It could also cause increased wholesale price volatility due to variability in yields and quality year-to-year.
Finally, expanding outdoor productionmay lead to lower-priced cannabis 2.0 products by generating an increased inventory of raw material from which extracts and infused products can be manufactured, which could bring more consumers into the legal market.