From the Editor

A Matter of Perspective

By David Halpert

I’m going to say something that will probably go against the grain of the current prevailing sentiment. Despite everything that’s happened so far over the last two years, I think the 2020s are going to be a phenomenally great decade. I really mean that. Despite the COVID-19 pandemic, and the added headaches with the recent Omicron variant, current inflation and many shortages in the supply chain, I still think that this decade is poised to be the best of the century thus far.

For many, it all comes down to a matter of perspective.

I don’t say this lightly (nor do I wish to shuck aside the tragic loss of life by the thousands domestically or the millions worldwide, nor the unintended consequences as a result, e.g., job losses, government debts, etc.). When we look back at the 1920s, we often associate it with The Jazz Age, Fitzgerald and what many would consider a Second Gilded Age, a period of widespread prosperity and growth following the First World War. Even today, we seldom remember that the decade was also in the full swing of the 1918 Spanish influenza epidemic, even as we go through our own growing pains with the current pandemic. And while hindsight is always 20/20 (and harder to see the forest for the trees while still living in the 2020s), I stand by my previous statement. That said, while my attitude toward 2022 is more flowery and positive than most my predictions for the Canadian cannabis industry are a tad more sullen.

Again, it’s all a matter of perspective.

If you don’t work in the cannabis industry (or aren’t tangentially affected by it), from the outside looking in or as an impartial observer you probably see an industry of incalculable growth that’s virtually recession-proof. However, having worked in cannabis now for the better part of four years now, a very different picture is painted once you get past the broad strokes the industry paints.

At the time of this writing Canada has the better part of 3,000 stores nationally with more than 800 cultivator licences having been issued by Health Canada thus far. The majority of cannabis retailers (no surprise!) are in Ontario and Alberta with roughly 1,300 and 736, respectively. As examined in our December article ‘Cannabis Retail Classified’, while we’re seeing sustained growth in revenues continuing their upward trend it’s largely the result of more cannabis retailers opening in the aforementioned jurisdictions, to which I fear that over the next 12-18 months we’re going to see a great contraction begin to take place. This in the form of independent retailers being swallowed up by larger retail chains or shutting down entirely en masse as certain regions become oversaturated. My fear for licenced producers is that as more licenses and players enter the market (as well as brands, formats, and SKUs in general), many craft and legacy growers are going to be squeezed out of the market entirely by razor-thin margins, larger competition, as well as a financial infrastructure that’s always at arm’s-length with the cannabis industry.

But again, it’s all a matter of perspective.

President / CEO, Straight Dope Media Inc.

@cannabispromag

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