The data-crunching public servants at Statistics Canada have devoted themselves to tracking Canada's cannabis economy, and their latest release paints a picture of an industry in the midst of a dramatic growth spurt.
When StatsCan started surveying licensed cannabis producers for its new report in fall 2017, there were just 55 such producers. Today, there are 102 licensed producers.
(Remember, even though all 102 of those companies have cannabis cultivation licenses from Health Canada, only some have met the regulator's requirements for a license to actually sell that crop to medical users and, after legalization, recreational users.)
As a whole, the 55 cannabis growers surveyed by StatsCan appeared to have lost money in 2016, with combined expenses of $302.8 million against total revenue of $245.7 million. In spite of that, the companies said they had big spending plans, with intended 2017 investment expenditures totalling $788.6 million — mostly on building new facilities.
Why would those companies spend so much money, despite expenses outweighing revenue? It all comes down to big bets on recreational cannabis legalization.
Three-quarters of the companies surveyed said they were "very likely" to "increase inventory in preparation for the potential cannabis for non-medical purposes market in 2018," and 18 per cent said they were "somewhat likely" to do so.
And who will provide the money for all that expansion? Investors looking for big returns, of course.
"Most responding companies indicated they were indeed likely to seek investment financing, through a variety of vehicles... Personal finance, American private venture capital and angel investors were the most frequently-mentioned sources of potential new capital," wrote Statistics Canada.
Canadian cannabis users are expectantly waiting for legalization, of course, but the StatsCan report is a good reminder that the future of a fast-growing economic sector is also on the line.
With investors piling in and expenses piling up, any further delays in legalization could mean some unpleasant boardroom conversations.
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- Be prepared: In light of cannabis legalization, the Canadian Centre on Substance Use and Addiction says more companies need clear policies surrounding substance use.
Elsewhere on the Weed Wide Web
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- When doctors disagree: Why did a VP of the Canadian Medical Association get jeered at a recent medical cannabis conference?