While the total number of units sold may have decreased, Canada’s total of unpackaged dried cannabis surpassed the 1 million mark in November.
The previous month, which marked the second anniversary of cannabis legalization in Canada, 961,070 kilograms of dried cannabis were waiting to be packaged and sold. The 6,775,519 units sold that month barely made a dent in the 27.67 million units already packaged and ready to go and were quickly replaced by the 10.86 million units packaged in the meantime. By the end of November, the unpackaged inventory had grown 8%, creating a total of 1,038,470 kilograms. During the month, despite selling over 6 million units, over 9 million units were packaged, and the packaged inventory grew to over 28.5 million.
This inventory bloat is most obvious in the dried cannabis category, but it’s actually worse in other categories. While dried cannabis has around 4.7 times more inventory than sales, the inventory of edibles is nine times higher than sales, and in the extracts category, there is 12 times more inventory than product sold.
Experts have speculated at the cause of the oversupply issue in the industry, however, no solutions have been proposed yet.
As far as sales go, total units sold decreased 10% between October and November of last year, falling from 9.8 million to 8.8 million. All categories saw a decline in November, the steepest being topicals, which fell 15%. Dried cannabis and edibles sales fell 11% and 9%, respectively, with extracts staying the steadiest with a 6% decrease. Retail sales saw a similar pre-holiday slump but picked up again closer to the gift-giving season.
With no end in sight to the growing inventory, the industry better do what it does best: innovate. If a solution isn’t found soon and the supply continues to outweigh the demand, millions of dollars in profit could go up in smoke.
November 2020 Inventory of Packaged Units
Dried Cannabis: 28,533,943
Edible Cannabis: 13,994,131