Inside View: Highs, lows or something more mellow in between?
December 22, 2023 By Gary Jones
As I write this, recreational cannabis has been legally produced in Canada on a commercial scale for five years already. Where did that time go?! It has been an interesting journey for the greenhouse industry as a whole. After all, whether you’ve been directly involved in growing the crop or not, it has surely impacted your business and thinking somewhere along the way. So, in the hopes of learning something, perhaps it’s timely to take a step back and have a look at how ‘outsiders’ have reported this adventure in to the unknown. Here’s a (select) few BBC stories on this topic from the last 15 years.
“Canada’s booming cannabis industry ranks alongside tourism and forestry as a money earner and employer, but the illegal trade has angered its US neighbour”1 So in 2008, the illegal cannabis market was seen as a behemoth understory of our national GDP, albeit an undeclared one (in tax revenue terms at least).
Fast forward 11 years, and the then reflective narrative looking back to pre-legalisation times was enthusiastic. “When Canada legalised marijuana just over a year ago, it seemed like anyone who was anyone wanted to break into the market. The media nicknamed the frenzy Canada’s “green rush.”2 The body of that article, however, was already looking at a less rosy picture for cannabis producers, and the tide was turning.
The world has kept a close eye on how we’re doing. After all, we’re something of an ‘experiment’ that other countries want to take opportunity to learn from. So, jump forward again to today. “Canada remains one of the only countries in the world that allows legal and regulated access to recreational marijuana. But five years after the drug’s legalisation, the country’s cannabis industry is struggling for survival.” “Five years later, the industry is dealing with economic struggles far removed from the enthusiasm of those early days.”3
That same BBC report mentions two companies (Aurora Cannabis and Canopy Growth) and of them says “Both companies, along with other cannabis producers, have also given out pink slips to thousands of workers in an effort to cut costs as they continue to generate little to no profit.” According to the same news item, “Part of the problem, experts and industry leaders say, is overregulation of the drug as the country attempts to toe a careful line between public health and building a robust cannabis industry. Others say it’s simply a matter of too many players and too much production that far exceeds demand.”3
There are of course other reasons for what is going on. Reasons not touched on in a public forum like the BBC. Nonetheless, none of this comes as a surprise to those of us in the greenhouse industry. The cannabis sector has perhaps been a mirror for any other new crop grown over the years, but in a much shorter timeframe, and with some particular ‘quirks’ given the nature of the product. And it has experienced more drastic extremes of highs and lows. Explicitly, looking at the ‘problems’ mentioned above, no matter what you grow, perhaps you can relate to the challenges of ‘over-regulation’ and ‘supply exceeding demand’, and the effect of those on prices and your business’ profitability. Over the years, new entrant ‘farmers’ and ‘growers’ with newly acquired land have often asked “What do you think I should grow to make lots of money?” One answer is “If I knew, do you think I’d be here telling you and not doing it?” An old boss of mine once told me to “Never chase a good crop”4, meaning this year’s boom crop might well be next year’s bust, so steady and slow often wins the day. The greenhouse equivalent of Aesop’s fable about ‘the tortoise and the hare’. Of course, this doesn’t sit well with those of us who are risk takers seeking higher returns, and all power to you if that’s how you tick. But I guess many others will be content to keep watching and see how this continues to unfold over the next 15 years.
1 BBC News “Canada cannabis industry boom” 12 August 2008
2 BBC News “Why Canada’s cannabis bubble burst“ 29 Dec 2019
3 Nadine Yousif, BBC News “Canadian cannabis market struggles five years after legalization” 17 Oct. 2023
4 Jim Large, ADAS advisor, personal communication. Bless him.
Gary Jones sits on several greenhouse industry committees in BC and welcomes comments at firstname.lastname@example.org.
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