There is no doubt that in Canada, the business of marijuana is booming. Well, it seems that is not the cases in every part of the country. The numbers are striking where Health Canada has issued an average of 43 licenses to produce medical marijuana in Ontario and only two in Quebec. That is quite a big difference that many interested in the marijuana business have noted.
It is noted that Quebec has been lagging being in the marijuana sector as compared to its neighbors. The province seems like it has not capitalized on the coming of marijuana legalization. The recreational marijuana legalization is expected to start in July 2018.
The province is expected to have a hearing at the National Assembly this week. It is expected that they will have to discuss the proposed legislation needed to regulate the sale and production of cannabis. It is about time that the province had a framework in place to allow for the entrepreneurs to cash in on the marijuana boom.
Growth of the cannabis market
There might be varied opinions when it comes to the Canadian Marijuana Market. It is expected that the market would grow as high as $22.6 billion in revenue yearly in just a few years. Even with the estimates sometimes being lower than this figure, there is still potential to make a lot more with the marijuana business in Canada.
The Parliamentary Budget Officer had put an annual national demand on recreational pot at 690 tons in 2015. This amount of weed can retail at $5.8 billion on the market today. When you see such numbers, it means that more people are willing to get into the marijuana business. Ontario so far is the leader when it comes to licensed producers of medical marijuana. Quebec seems to be lagging behind with only Hydropothecary and Aurora being the only companies to have set up shop in the province.
Hurdle accessing capital
So, what could be the reason for such a low number of producers in Quebec? Banks in the area are always willing to back the projects in their early stages. These are sentiments from many people who have worked in the marijuana sector before. The problem comes when you have to get the license. It has been reported that getting the license in Quebec is not only pricey, but it also comes with a lot of bureaucracy. It is possible that some of the potential investors and entrepreneurs might have been scared by the strict laws and regulations they have to follow.
It is expected that some of the biggest names in the marijuana sector would set up shop in the province eventually. This will happen if the province is willing to do make slight changes to the current laws and regulations that are currently available. Aurora, one of the biggest companies, has already set up shop in the area. It is expected that they would harvest 4,000 kilograms of weed annually from their facility. The company is also hoping to get a license to allow it grow recreational marijuana that would also help provide environment opportunities.
Farmers want a piece of the action
The Quebec’s union of agricultural producers is also hoping that the smaller farmers would be given a chance to get a shot at the product. The group has estimated that if allowed, the marijuana sector could generate an average of $500 million to $700 million annually. This is an economic potential that the greenhouse farmers should not miss in Quebec. Currently, the government has already prohibited of production of marijuana in fields, but only allowed for setting up greenhouses.
Since the cost of hydro-electricity in Quebec is low, the use of greenhouses should not be a problem. It also gives the residents of the area an advantage over the other provinces where it could be expensive to run a greenhouse.
The province has continued to downplay the economic benefit that marijuana can create. The price and tax rate are yet to be set in Quebec, which leaves many things in a limbo. Even when the producers have the product, they would not know the price to sell it in the province. Most experts in the area are suggesting that cannabis be sold at an average of $7 to $10 per gram.