News
Weed Glut Persists in Canada: Understanding the Oversupply
Add MyCannabis.com to your preferred sources on Google
The Canadian cannabis industry is facing a persistent oversupply crisis. In the most recent reporting year, licensed producers (LPs) destroyed an estimated 425 million grams of unpackaged and unsold cannabis — a record high and more than 50% greater than the previous year’s total. This trend has continued since the legalization of recreational cannabis in 2018, with cumulative destruction now surpassing total legal sales in some years.
In 2018, Canada destroyed 11.5 million grams of unpackaged cannabis. Since then, the annual amount destroyed has grown sharply, raising concerns about industry sustainability and financial viability.
The Scope of Canada’s Cannabis Oversupply
Swipe to scroll →
| Year | Cannabis Destroyed (grams) | % of Annual Production Destroyed |
|---|---|---|
| 2018 | 11,501,000 | 11% |
| 2019 | 155,780,000 | 15% |
| 2020 | 279,837,000 | 19% |
| 2021 | 425,325,000 | 26% |
The data shows a steady upward trajectory in destroyed cannabis volumes. According to MJBizDaily analysis1, the total cannabis destroyed by LPs since legalization has exceeded legal sales in some periods — a clear indicator of structural oversupply and inefficient market planning.
What’s Causing the Weed Glut in Canada?
When recreational cannabis was legalized in 2018, many large-scale producers expanded aggressively, investing heavily in greenhouse real estate and infrastructure. This “produce first, sell later” approach quickly outpaced actual market demand.
From 2018 to 2020, licensed producers sold less than 20% of what they grew. Instead of scaling back early, production continued at high levels, leading to record destruction volumes in subsequent years. The oversupply also contributed to significant real estate write-downs and asset sales.
Another major factor is competition from the illicit market. Despite a gradual decline in size, the black market still accounts for roughly 50% of total cannabis sales2 in Canada, further limiting demand for legal products.
How to Address Canada’s Cannabis Oversupply
To restore balance, licensed producers may need to make deep production cuts — potentially as much as 20% of current capacity — to align supply with actual consumer demand. This would help reduce waste, stabilize prices, and improve profitability.
At the same time, stronger enforcement against the illicit market could shift more consumers toward legal channels, effectively doubling potential legal market demand. Coordinated action between regulators and industry stakeholders will be key to achieving long-term stability.
References:
1. MJBizDaily. (2022). Analysis of cannabis supply and destruction in Canada.
2. Public Safety Canada. (2020). The illicit cannabis market in Canada.
