A Government Gone to Pot: Why Centralizing an Industry Leads to Failure


Legal Marijuana shortages have been a problem in Canada from the very first day of legalization.

One wonders how distributors could fail to produce a plant that grows naturally in such abundance, that the industry was once thought an untenable venture due to how easily it would be to circumvent via growing one’s own plants. Despite this, massive issues have erupted due to an initial failure of some distributors to supply even 4% of the amount asked for by one Province, and hiccups have continued in supply along the way ever since.

Naturally, this issue of legalization was one brought up by Prime Minister Trudeau on the campaign trail back in 2013 in Kelowna, British Columbia, at least if the National Post is to be trusted. Since then, he has had years to plan out how this structure would work, among other issues, and years to find people who would assist him in implementing this structure on a National and Provincial level.

Indeed, for those unaware of the Canadian distribution system, Provincial governments have been given their own mandates over specifics regarding the amount citizens in each Province are allowed to purchase, and if they' are allowed to legally own and grow their own plants. To my knowledge, all of the legal dispensaries are provincially owned and regulated, though I will admit this is based off of limited knowledge of Quebec, New Brunswick, Newfoundland and Ontario. I am not certain if the Prairies operate on a similar model, but I would assume they do considering the consistency elsewhere.

What baffles me is the incredibly low yield from distributors, considering that many who have been in the business of growing that applied for licensing have been licensed since 2015, three full years before the plant was finally legalized in the Great Green North.

So knowing this, why is it that issues of supply have continued? Why are we at the point that illegal black market operations are still profitable enough to warrant police placing cement blocks in front of the doors of these places in order to prevent traffic in and out?

Perhaps this once again boils down to an issue of over-taxation, as was the onus behind the massive undercutting of the tobacco market via “Indian cigarettes”, a popular method many Canadians took advantage of to get their hands on cheap tobacco from First Nations sellers who aren’t charged tax for their purchases of it, who would then re-sell rolled cigarettes at a much cheaper price than registered store-fronts.

Or, and what I consider to be more likely, perhaps this stems from mismanagement. As you may be able to tell from the initial article linked, the SDCQ, while only receiving 4% of what they asked for, also vastly underestimated how much would be needed to ensure they had a steady supply. Obviously it would be fair to underestimate slightly, but for those unaware, most of the SDCQ dispensaries were empty, or at least nearly completely empty by day 3.

This shows that those in charge woefully underestimated the size of their market, and also did not do their job of ensuring they had suppliers that would be able to meet the demand of their market lined up. This resulted in a catastrophic failure of a launch for the industry, which it is still reeling from and trying to recover from to this day.

Legal Marijuana isn’t going anywhere, of course, but when the government gets its hands involved in lengthy licensing processes for distributors, and fills their dispensary management with bureaucrats who don’t know how to meet market demands or build connections to ensure continuous supply of product, you naturally run into short-falls. Perhaps if the dispensaries were treated the same way alcohol sales are treated, this would be far less of a problem, but apparently expecting the Government to act in a way that is consistent, logical, and sound is simply a bridge too far to cross these days.

Perhaps that owes to the officials all sitting beneath it, collecting their tolls while setting fire to the whole damn thing. If anything can be said, it’s that they’re certainly good at lighting up our expectations, before leaving what little trust we had in them to vanish into so much smoke.