While a shortage of marijuana is expected to precede any glut by a number of years, the potential for cannabis commoditization is already a consideration for many licensed cultivators in Canada.
Greg Engel, CEO of New Brunswick-based Organigram, said commoditization, at least as it relates to cannabis, boils down to two things:
- Excess supply over demand for standard and low-grade cannabis.
- Products that aren’t differentiated.
Places like Colorado have seen severe price compression on nonpremium marijuana products, but successful premium products have been able to avoid the commodity trap by fetching higher prices.
Canada’s licensed cultivators are already taking action to differentiate their companies and products and to build sustainable brands for the medical marijuana and pending recreational market.
“The key for any company to avoid being pulled into a commodity market is a differentiated product, and