Saskatchewan people poised to smoke 25 million joints a year: economist

Saskatchewan like the rest of the country has a recreational pot problem. There isn't enough legal cannabis to go around.

Jason Childs, associate professor of economics atthe University of Regina, and many others familiar with the industry predicted the shortage months before Oct. 17, the day recreational cannabis became legal nationwide.

"It takes time to ramp up and nobody was really sure what the demand was actually going to be in the legal market. So that's one issue," said Childs.

He also predicted one crucial element in the Saskatchewan pot puzzle: how much people in the province will actually want.

"Based on past patterns, we're looking at somewhere around the order of 25 tonnes of product."

Childs's estimate translates to 25 million joints, packed with the standard one gram of cannabis.

Shortage is temporary

The cannabis that people in Saskatchewan consume could potentially all come from producers in the province. The three producers already licensed in 2017 (Aurora, Canopy, and United Greeneries) have a combined stated capacity of approximately 37 tonnes of product, according to Childs.

While the Saskatchewan Liquor and Gaming Authority regulates the retail sale and distribution of cannabis, it does not track demand.

"There are inventory management requirements in place to ensure inventory is being tracked and to ensure it's coming from a legal, safe source," said David Morris, an SLGAspokesperson.

"But in terms of demand and purchasing in communities or within the marketplace, those issues are left to the retailers."

While the number of retail stores in the province has been capped at 51, there is no cap for producers.

Saskatchewan has one licensed cannabis wholesaler and 20 federally licensed producers, registered by SLGA to sell product to retailers and wholesalers.

According to Morris, there are "a number" of applications ongoing in the systemproducers that could eventually be selling to Saskatchewan retailers.

Just five of those retailers in the provincewereopen at last count. Two have closed since Oct. 17 because of the supply shortage.

Suppliers almost ready to grow

The CEO of Regina-based OneLeaf Cannabis, Trevor Green, is pleased with Health Canada's licensing process so far, even though the craft grower may not begin planting until the new year.

"There's been a transition period and work to do to get online with their new licensing and tracking system," he said.

OneLeafis in the final stages of building its facility, which could produce around 1,500 kilograms in its first year.

First, though, the company has to submit an evidence package to Health Canada by video.

"It's essentially a tour and you show all the various rooms and locations and the fact you built it out ot the specifications provided by Health Canada," said Green.

The company's ultimate plan is to build the facility further, and eventually produce 7,000 kilograms per year.

But "things change really fast in the industry," he said, and so could the company's plans.

Saskatchewan's roadmap for legalization, production, and retail suits OneLeaf just fine, except for one detailcrucial to craft growers.

"We hope Saskatchewan will follow Ontario's lead and let producers have farm gate sales, similar to a winery or brewery," he said.

"It would be much easier for us to compete if we can sell our product from our site."

Saskatchewan's place in the market

It's hard to know how Saskatchewan will fare compared to other provinces since the industry is in its infancy.

"It'sprobably going to take a year or two until things really start to smooth out and we get some bottlenecks in the distribution and supply chains resolved," said Jason Childs.

Saskatchewan does have a potential advantage, though, because of its unique privatization of the production and retail system, which gives producers and retailers options.

In places like New Brunswick, the province has one retailer, with select suppliers.

"The advantage is [New Brunswick] had this structure set up and in place, and suppliers signed well in advance," Childs said.

"So they started in a better place but they won't be able to move as quickly as we will."