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The distribution issues that have plagued the cannabis industry in the first 12 days of legalization are threatening to significantly impact the financial performance of major licensed producers, predicts GMP Securities analyst Martin Landry.

“The extremely limited distribution network in many provinces, fulfillment challenges in Ontario, inventory shortage in Quebec and LPs coping with limited availability of excise stamps may take several months to be resolved,” Landry wrote in a Monday morning note. “It becomes increasingly clear that recreational cannabis sales in 2018 will be much lower than previously expected.”

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Many licensed producers, including Canopy Growth, CannTrust, and Aurora, are set to report quarterly earnings in the second week of November. Although those numbers will not yet reflect post-legalization sales, they will include recreational product shipments sent out by the producers to the various provinces.