Whenever something new is launched – be it a movie, motor vehicle, or mobile device – there is a temptation to focus on any flaws. People are quick to judge the success or failure of any product introduction based on minor details not major developments.
The same has been true of the recent launch of Canada’s legal cannabis industry. Countless critics have gotten caught in the weeds, so to speak, measuring the early days of this unprecedented commercial enterprise based on modest delays and trivial disruptions.
While it is far too early to make any reasonable assessment of the legal cannabis industry, it’s important that we take a moment to acknowledge that it has been a momentous achievement. Canada has created an entire industry in the space of only three years.
Every aspect of the legal cannabis supply chain, from producer to retail, had to be developed on an expedited basis within a heavily scrutinized – and politicized – regulatory environment. In that context, it’s incredible that the October 2018 deadline was met.
Yes, some consumers have experienced delays in obtaining their orders. In some cases, this may have been due to a disconnect between the projected supply and demand. In others, it’s possible the Canada Post labour disruptions may have had an impact.
Whatever the reason, though, those issues are not unique to the cannabis industry. How often do people have to wait for the latest gadget or the most popular gaming system because they quickly sold out due to high demand or another distribution issue?
When Apple releases its newest iPhone, it’s not uncommon for people to line up around the block to get their hands on the device on launch day. Though Apple has control over most aspects of their supply chain, it’s not uncommon for them to have shortages.
For the launch of legal cannabis, the logistical challenges were multiplied exponentially. Literally hundreds of separate producers, distributors, and retailers, many working independent of each other, had to meet an instantaneous spike in consumer demand.
Moreover, because there was no legal cannabis industry anywhere in Canada, there was no soft-launch in strategic markets to test the system. (If you did a trial run, you’d go on trial.) When the clock struck midnight, everything was activated for the first time.
Adding to the complexity of the industry is the fact that virtually every province has adopted their own set of rules and regulations. In some cases, the election of new governments resulted in changes to those regimes months, weeks, or days before the launch.
Ultimately, much of the criticism can be attributed to a widely-held misconception that the launch date was the end not the beginning. October 17th wasn’t the final step in the legalization process – it was among the first. This is a marathon, not a sprint.
First, many jurisdictions – most notably Ontario – are still ramping up their cannabis retail industry. Initial distribution was by online order given the recent decision by the Ford government to shift from public sector retailers to private sector retailers.
Second, only some of the cannabis product lines became available on launch day. There is still work being done by government and businesses to finalize the rules and regulations around the sale of so-called infused products – edibles and beverages.
Third, Canadians are still coming to terms with the cultural elements of cannabis legalization. Law enforcement, employers, parents, and consumers themselves are all working, even struggling, to get their heads around how to adapt to this new reality.
And, adaptability is key. No matter how rigorous our preparations have been – it would have been impossible to envision every possible contingency. Canada will undoubtedly discover new challenges and opportunities that nobody ever contemplated.
Yet, so long as government and business continue to work together – remaining flexible in the face of unforeseen developments – Canada can remain a model for the world. It is too early to declare success or failure, but the initial signs are encouraging.
About H+K’s Cannabis Practice
H+K has a team of experts that have been advising clients in the medical cannabis space since 2013. We assist clients in navigating the regulatory and application process, support their communications and marketing efforts and provide public affairs support which allows our clients to achieve success today, while preparing for the future of this fast-changing industry.