Want to Apply for a Cannabis Dispensary Licence? Increased Production Could Create New Opportunities

AGCO cannabis dispensary

If you’ve been following Canada’s cannabis legalization, you might have heard about issues that stores have been having with shortages. In fact, you may even be considering applying for a cannabis dispensary licence but are waiting until these shortages subside before taking the leap.

That hesitation is understandable, but the good news is that there is reason to believe that cannabis shortages may soon be a thing of the past. With companies ramping up production, new opportunities could become available.

Increase in Production Capacity Could Help Address Supply Issues

Legal cannabis is still a very new industry, so it’s not surprising that there have been some supply chain issues. Cannabis shortages have been the most obvious examples of those issues, with retailers in some provinces struggling to keep their shelves stocked. In some cases, that has meant cannabis stores in certain locations have had to reduce their hours.

However, this problem could improve over the coming months. Production is regulated by Health Canada, which has been approving more production licenses for new and expanded facilities. The federal agency has approved 93 new production sites in the past year and a half, which is more than a 200% increase from the number approved in the previous four years. On top of that, 200 expansion amendments have also been approved which has already helped bring total production capacity from 2 million to 14 million square feet. Of course, cannabis takes time to grow, so the benefits of that increased capacity could take some time to be felt.

Supply chain issues could be resolved as production ramps up

Supply chain issues could be resolved as production ramps up

It should also be pointed out that according to Health Canada cannabis shortages aren’t entirely a problem with supply itself, but with getting that supply to market. The federal agency says that cannabis inventory across the country actually exceeds sales, but there have been logistical issues getting that inventory to the shelves of cannabis stores. Those logistical issues could eventually be ironed out as producers and wholesalers sign new contracts for getting cannabis from production facilities to retailers.

How Increased Production Could Help Those Applying for a Cannabis Dispensary Licence

This increase in production might be good news for anybody looking to apply for an AGCO cannabis retail licence. Currently, the Ontario government has restricted the number of licences the AGCO—which regulates retail cannabis in the province—is permitted to approve. In January, the first licences were decided using a lottery system, with the AGCO restricted to issuing just 25 licenses due to cannabis shortages.

Once supply issues are ironed out, retailers could have more business opportunities

Once supply issues are ironed out, retailers could have more business opportunities

However, this lottery system is not expected to be a permanent fixture. Encouragingly, the Ontario government has said that once cannabis supply issues are addressed, it plans to allow an unlimited number of AGCO cannabis dispensary licences. In other words, so long as there is demand for cannabis stores and a supply of cannabis, the AGCO appears set to provide retail licences to eligible businesses and individuals who apply for them. In fact, the provincial government expects Ontario to be able to support up to 1,000 cannabis stores once restrictions on retail licences are lifted.

Are you interested in applying for a cannabis dispensary licence?

Contact the Academy of Applied Pharmaceutical Sciences today to learn more about our cannabis programs!