Cristian Phirotz

Due to Canada’s Roll-Out Issues, Most Cannabis Sales Remain Illicit

Issues with supply, packaging, and taxation will keep the vast majority of cannabis sales in the illicit market this coming year.

Full story after the jump.

A variety of issues with Canada’s rollout of the legal cannabis market is expected to keep 71 percent of cannabis sales in the illicit market, according to a story by the Motley Fool.

Supply issues have been a problem across the country. Due at least in part to a huge backlog of license applications, it takes Health Canada nearly a year to go from receiving an application to issuing an actual license.

Packaging has also been a problem. Strict regulations about childproof packaging with specific labeling has created a shortage of possible containers.

Ultimately, growers are behind. While many companies who are poised to move into the space would’ve liked to have started constructing facilities much earlier than they did, most producers were not willing to take the risk until the law was definitively passed. It could take two more years before producers are fully up to speed for Canada’s market.

The analysis also reports that by 2020 this figure will have dropped precipitously to 34 percent, however. In the near term, analysts also dropped sales figures for the legal market for a whole, as well made predictions for as for specific companies like Canopy Growth and other market leaders.

Canadian Prime Minister Justin Trudeau has pushed for lowering the excise tax rate to 10 percent to help battle illicit sales.

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