Canada’s cannabis supply far greater than demand

The cannabis market in Canada offers huge opportunities for licensed producers. However, it’s a critical period, and a good time to ask important questions about the future. 2019 was not the best year in the cannabis industry as many shareholders suffered serious losses, while 2018 was significantly better for legal cannabis companies. Canada could become a leading cannabis exporter.

Canada is playing a very important role in cannabis cultivation. However, Canada’s cannabis supply may be causing issues for the industry.

Industry leaders such as Canopy Growth and Aurora Cannabis are based in the country. There were several reasons for the upward trends of these Canadian cannabis stocks. However, cannabis is also cultivated in numerous U.S. states.

Hemp.im is a mobile application that is exclusively dedicated to hemp and marijuana news as well as the very latest news about the general hemp and cannabis industry.

The app covers topics like the latest changes in regulations, cannabis legalization, health benefits of hemp and products that are made from hemp.

The cannabis industry experienced heavy losses in 2019

Cannabis shares have been trading very high on the stock exchange for a long time. Rising prices and even a hundredfold increase in capital were not uncommon.

2019, however, was the year in which many shareholders suffered heavy losses.

The analysis of the cannabis market suggests that the overproduction of cannabis could be an insignificant factor for the decline. As such, and overage in Canada’s cannabis supply could be weighing on the industry.

Most of the cannabis companies have shown positive growth in 2019, but CannTrust, Tilray and KushCo stocks have fallen more than 40% this year.

Canada’s cannabis supply is growing

Canada has a cannabis supply that is higher than demand, causing problems throughout the industry. (Source)

In Canada, 328,187 kilograms of cannabis were stored in August 2019, and only 12,917 kilograms were sold that month. This was shown by the data of the “Government of Canada.”

In addition, a clear trend can be observed. The gap is widening month by month, stocks are increasing sharply, while sales are rising only slightly.

Germany is showing low results in cannabis sales

While Canada’s cannabis supply continues to grow, in Germany, about 3,100 kilograms of cannabis were legally imported in 2018.

This makes it clear how high the stocks in Canada and Oregon seem to be at just under 330,000 and 450,000 kilograms respectively.

Nevertheless, the Federal Institute for Drugs and Medical Devices decided that cannabis should also be cultivated in Germany in the future.

This year, a total of 2,600 kilograms of cannabis were grown. Sales of medical cannabis covered by insurance continue to increase in Germany, reaching new highs in the second quarter, according to newly released data.

Canada’s cannabis supply has possible impact on cannabis stocks

The oversupply of cannabis in Canada could affect overall prices. (Source)

The drug policy spokesman said that the “market has been swept away” and that there are “supply bottlenecks.”

However, the data rather suggest that there is an oversupply of Canadian cannabis. It seems that the hype surrounding the new “green gold” has led companies to grow far more for Canada’s cannabis supply than can actually be sold.

This could put pressure on the price of cannabis and thus also making it difficult for many cannabis stocks.

(Featured image by Ndispensable via Unsplash)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Hemp.im, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in KRYPTO SZENE, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail. Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Hemp.im assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Hemp.im is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.

Angelique Moss

Angelique Moss is a London-based entrepreneur, writer, and traveller. The world of business, finance, and technology, is her preferred cup of tea. She also writes about the developments and discussions on health, art, luxury and media. A top writer for several Medium publications, she has published hundreds of widely read articles on investing, stocks, global markets, cannabis, and technology for multiple platforms. She is also interested in culture, history, and social affairs.