The cannabis industry has been full of surprises in its short history, many of them caused by the unintended consequences of regulations. Some were positive surprises: During the 2020 second quarter COVID-19-lockdowns most regulators somewhat surprisingly decreed cannabis sales an essential service without much discussion. Many even allowed curbside pick-up and delivery for the first time to allow medical patients – and even adults coping with anxiety – safe access to their medication during the pandemic. Cannabis sales continued to boom while many sectors shrank.
The downside surprises have been more along the lines of unrealistic market-performance expectations dashed, in some cases repeatedly. In an industry that’s moving a $200-billion worldwide consumer product category into legal channels for the first time in modern history it’s easy to develop unrealistic expectations and hold on to them too long. As the industry grows in experience around the world it can expect fewer surprises, positive or negative, from unexpected impacts of regulations.
Here’s some of the lessons learned so far:
Lessons From Canada
There is such a thing as too much cannabis. In the run-up to the 4Q 2018 launch of adult-use sales, cash-rich licensed producers (LPs) built up 66 metric tons of dried flower inventory despite the Canadian federal government leaving the allowed number of stores in the hands of clearly recalcitrant provincial regulators. With just a handful of stores open by year’s end, only about 26 tons sold that quarter. Even so, few LPs cut back on their production levels. Monthly demand for dried flower for all uses had grown to about 30 tons …