Canada’s less-popular cannabis producers are about to have even more unsold inventory on hand, as the Ontario Cannabis Store says it’s making more space for products that consumers actually want.
Additionally, the provincial distributor and seller is launching designations to feature craft weed, which it plans to implement by this spring.
In a webinar Friday, the OCS announced a “core assortment” program, which involves making sure desired products are consistently in stock as well as removing undesirable product — the province-owned company says around 200 products are already slated for removal.
As part of the initiative, the OCS says it’s identifying products with consistent sales and working with their producers to ensure it can make an “always in stock” commitment to retailers and consumers. This step toward supply reliability will provide greater stability for Ontario’s growing retail network, the Crown corporation says.
The favourable assortment of cannabis goods will be reviewed every six months, according to the OCS, to reflect products consumers are consistently buying.
“To take another step towards maturing the Ontario cannabis marketplace, the OCS is establishing a core assortment of products that will further drive the stability of supply for cannabis consumers,” senior communications director Daffyd Roderick said in a statement. “Consumers are more and more impressed with the great products coming from our licensed producers, and they have told us that what they really want now is to be able to reliably purchase those products in stores and online.”
This commitment to customers involves both continuously introducing “innovative” new products based on customer insights, but also discontinuing unpopular products.
Many of Canada’s hundreds of licensed cannabis producers are holding onto an ever-growing amount of finished and unfinished inventory, leading to millions of dollars in write downs by publicly traded firms. The announcement that unpopular products will be delisted doesn’t bode well for already glutted firms.
Read more: 2020 in review: Cannabis and Covid-19
As of last September, 47.2 million packaged units of cannabis products were held in inventory by cultivators, processors, distributors and retailers, Statistics Canada reported. Distributors and retailers held 38 per cent of the total inventory.
According to the agency, the total inventory of packaged units of dried cannabis represents 3.8 times total sales. Likewise, total inventory of packaged units of cannabis extracts represents 6.9 times total sales.
Further confounding big weed players are incoming designations from the OCS that will feature craft producers. To use the designation, products must be sourced from small-batch facilities that cultivate 10,000 kilograms of weed or less each year, and deploy handcrafted processing methods, including hang-drying, hand-trimming and hand-packaging.
The OCS told Mugglehead it’s aiming to have the craft program in place by this spring.
B.C.’s Pure Sunfarms is Ontario’s top seller in the dried flower category. Photo by Nick Laba