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Why The US Cannabis Industry Is Better Positioned Than Canada To Go National

By Benzinga Staff Writer, The Fresh Toast on

Published in Cannabis Daily

Should federal legalization pass in the U.S., sales could boom not only because of broader demand, but because American companies are prepared for this eventuality.

By Lauri Kibby of Kings Garden.

Cannabis industry optimism in the United States is mounting alongside increasing expectations for national legalization.

Skeptics, however, point to the Canadian experience and suggest we temper our enthusiasm. To be sure, years removed from 2018 legalization, most marijuana producers in Canada are still reporting losses.

Cannabis has substantial potential in Canada, but it has been a bumpy ride so far. At first, producers were not prepared with enough supply to meet demand. There was a substantial backlog in orders, and producers were not sure what products or strains would be popular and where.

Now there is too much supply. Rosy projections have been slow to materialize in a tightly regulated distribution system that largely bans advertising and marketing. This government intervention has hindered sales and made it difficult to balance supply with demand.

 

Additionally, coronavirus disruption slowed retail store growth, adding to higher inventory and causing price deflation.

The U.S. is much better prepared, however, and Canada’s tribulations are part of the reason why: We have learned from our northern neighbor’s experiences. We know not to repeat the same mistakes. Equally important, we have a long runway of experience established in California, the nation’s largest state and a major cannabis market on the global stage.

California cannabis growers have been developing legal marijuana products since 1996, longer than everywhere but Amsterdam.

Driven by California and other states in recent years, legal marijuana growers in the U.S. have earned the reputation of creating the best products in the world, scientifically grown and tightly regulated for quality and safety.  They have also mastered the analysis necessary to predict trends in consumption, allowing cultivators to adjust production in anticipation of shifts.

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