As had been predicted by analysts, supplies of recreational marijuana could not meet the massive demand for the product even for the first day when retail outlets opened. The shortages did not discriminate between online stores and brick and mortar outlets since both were equally hit.
Long queues could be seen outside the retail stores as clients waited to enter the premises and buy cannabis to celebrate legalization day.
However, many people were turned away as the stores sold out everything that they had stocked ahead of the opening day. It isn’t known how quickly these shortages will be resolved.
One store owner remarked about how ironical it was that his establishment went dry at exactly 4:20. Of all times!
Even those lucky customers who entered the stores while some products were still available were unhappy that they could not have their choice of cannabis products since only a small range was available by the time those clients got in.
Marijuana retailers are unhappy that they let down lots of their customers on such an important day. The ideal situation would have been to avail more than customers need so that a pattern is established that clients will always have their pick of cannabis products at their preferred retail store.
Three major points need to be noted about what is unfolding after the legalization of recreational cannabis.
First, existing and new producers need to ramp up their production so that such shortages don’t plague the industry for longer than is unavoidable. It is hard to comprehend how businesses can fail to plan for such a huge demand which any layperson could have predicted.
Secondly, such shortages can have an adverse effect on the stocks of cannabis companies since the market always responds to the prevailing sentiments. Consumers aren’t happy, and that may hurt stock prices.
Third, shortages are bad because they provide an unconscious justification for the black market. If someone wants a product badly enough, they will reach a point where any supplier will do, including the black market which has honed its logistical systems over the years. The black market isn’t good for consumers (product quality issues, for example), it isn’t good for legal cannabis businesses (lost customers and revenue) and it isn’t good for the government (lost taxes, public health issues, law enforcement headaches, etc.).
Youngevity International, Inc. (NASDAQ: YGYI) and American Premium Water Corp. (OTC: HIPH) must be longing for the chance to operate in such a market where demand is so high that every product made will be assured of a buyer.
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