The Canadian Government is More Than Tripling Cannabis Licenses

Ottawa is close to licensing 208 new cannabis companies as official producers. This would more than triple the number of cannabis licenses and vastly increase industry capacity.

The pressure is on for Health Canada. Canadians want a speedier approval process for licensing marijuana producers. The industry is wrought with complaints of archaic application processes that take years to complete. Up to now, only 80 companies in the country have obtained cannabis licenses for production. But only a mere 36 of these companies have also obtained the license to sell.

This huge surge of late-stage applications has the potential to immensely change the structure of the legal cannabis industry in Canada. In fact, this is the first time the government has publically revealed the figure. The information has certainly intrigued investors and Cannabis enthusiasts. Kirk Tousaw, a B.C. lawyer working for a number of cannabis companies, revealed that Health Canada is upping their staff to process a higher volume of applications.

“There has always been a large backlog. What we have seen in the last six months is a dramatic increase in the number of successful applicants and the pace of applications moving through the system.”

Trudeau Says Legalization Date “Will Not be” July 1st

cannabis licenses
Prime Minister Justin Trudeau is greeted at City Hall, December 19, 2017, in Montreal. Via THE CANADIAN PRESS/Paul Chiasson

Will the new licenses be enough to influence a successful transition to the legal industry? Only time will tell. But initial reports pegged Ottawa to try and move bill C-45 through the Senate to legalize cannabis by July 1st, 2018. Now, Prime Minister Justin Trudeau has addressed those comments directly.

In an appearance on the TVA network, Trudeau stated clearly that legalization will not occur on Canada day 2018. But the goal remains to legalize cannabis by July. Rosalie Wynoch, a policy analyst at the C.D. Howe Institute stated that Health Canada will continue to process applications “as fast as they can.” She says,

“The more producers they license, the sooner they can start producing product.”

With legalization fast approaching, it is unlikely that the producers will meet the initial demand. Most experts say the Canadian government will experience shorts on supply. But as the industry responds, the market will hit a saturation point. What remains to be seen: how profitable will the producers be if they are limited to monopolized government contracts?