Demand for legalized cannabis draws lineups, heavy web traffic across Canada

Canopy Growth CEO Bruce Linton, left to right, provides the receipt for the first legal cannabis for recreation use sold in Canada to Nikki Rose and Ian Power at the Tweed shop on Water Street in St. John's N.L. at 12:01 am NDT on Wednesday October 17, 2018. Image Credit: THE CANADIAN PRESS/Paul Daly

October 17, 2018 - 9:00 PM

TORONTO - Cannabis was "flying off the shelves" in retail outlets and online stores across the country as Canadians looked to make their first-ever legal purchase of recreational pot and participate in the historic cultural moment.

Less than 24 hours after Canada became one of the few countries around the world to legalize cannabis for adult use, some private retailers were either sold out of supply or were tending to long lineups and expected to run out by the end of the day.

Newfoundland and Labrador cannabis retailer Thomas Clarke said he sold out of his cannabis supply late in the afternoon on Wednesday, and he doesn't anticipate receiving more products until next week.

He opened his store, Thomas H. Clarke's Distribution, at midnight in Portugal Cove-St. Philip's, N.L., but was turning away customers by the afternoon.

"Most of my friends and people who were gonna come today were going to come after work and now I gotta let down thousands of people, which is really bad for business and for my nerves," said Clarke.

He said he sold out of the 100 pre-rolled joint packages 30 minutes after midnight. Canopy Growth Inc. and Aurora Cannabis were the only two suppliers in the province with products available for the first day of sales, he added.

Wednesday marked the opening of what's expected to be a massive market for legal sales in Canada — as much as $4 billion in the first year, according to a report from consultancy Deloitte.

Still, Canadian investors were less enthusiastic than consumers, as many of the industry's biggest players saw their stock prices fall on Wednesday.

Canadians eager to make their first legal purchase of recreational cannabis were met with long lineups at retail stores, technical glitches online and a relatively limited product selection.

Jimmy's Cannabis in Martensville, Sask., had a lineup of more than 100 people at one point and had processed more than 200 orders by mid-afternoon, said co-owner David Thomas.

"We ran out of one strain, so we still have plenty, but it will go fast here," he said, noting his supply might run out if demand continued at the same pace.

Meanwhile, the Natural Vibe on Water Street in St. John's was only selling ingestible cannabis oils, after selling out of all other cannabis products at around 11:30 a.m.

Most Canadians' first purchase of legal adult-use pot will likely be online, as there were relatively few retail stores ready on Wednesday. What's more, the stores are unevenly spread across Canada's vast geography. While Newfoundland and Labrador and New Brunswick had around 20 stores open in each province, some of the most populous provinces, such as British Columbia, had just one location ready. Ontario won't have any physical stores until next year.

Shopify Inc., whose e-commerce software had been chosen by provinces including Ontario and several private retailers, said Canadian cannabis websites were processing roughly 100 orders per minute. The websites powered by Shopify also processed "hundreds of thousands of orders" in less than half a day, added company vice-president Loren Padelford.

Alberta's cannabis sales portal saw a wave of traffic after it went live at 12:01 a.m., prompting the Alberta, Gaming, Liquor and Cannabis commission to put online customers into a virtual queue to avoid an outage.

"While the site had been rigorously tested, the surge of users quite simply exceeded our expectations," said a spokeswoman for the commission. By 12:50 a.m., the queue had cleared and by 11 a.m. it had processed more than 5,000 orders.

The Ontario government's website OCS.ca — currently the only way to buy cannabis legally in Ontario — was running smoothly, but drawing mixed early reviews on social media. While there was product available, the number of dried cannabis items listed online continually shrunk throughout the day.

In the legislature on Wednesday, Ontario Premier Doug Ford said the website handled over 38,000 orders after it launched.

Meanwhile in Winnipeg, a private cannabis store was struggling to keep up with online demand as well.

Gary Symons, with Delta 9, said 100 orders were processed in the first minute or so when the company's website went live at midnight and the online store was sold out by 4 a.m.

"Our product is literally flying off the shelves. I've never seen anything like it," he said. "If demand keeps up like this, there is some thought that we could run out of some of these products."

Industry players and watchers had warned to expect product shortages at the outset. Licensed producers and retailers have said it has been a compressed timeline for such a complicated endeavour.

Think-tank C.D. Howe warned in a report last week that current supplies of cannabis in the fourth quarter would only meet between 30 and 60 per cent of total demand, but it said the shortages would be "short-lived" as more producers are licensed and production capacities expand over time.

These supply issues were "widely expected" as it is a "brand new marketplace," said Allan Rewak, the executive director of the Cannabis Council of Canada, which represents licensed medical marijuana producers.

"Over the coming weeks and months we'll see more variation in products available through the various Crown options and private options. ... And it's simply a result of a brand new stream coming online."

Despite the bumps in the initial rollout, many consumers were ebullient at simply being able to buy a drug that had been prohibited in Canada for nearly 100 years.

At one of the six retail shops that opened in Edmonton on Wednesday, "cannistas" at Fire & Flower Cannabis helped customers make their selections and punched their orders into tablets.

"The store's beautiful," said Curtis Hrdlicka, the first to walk out of the shop carrying a Fire & Flower tote bag. "It's a mix of a pharmacy and a jewellery store."

When the doors of the cannabis store in Kamloops, B.C., opened at 10 a.m. local time, the line had grown to a few dozen people and a cheer erupted from the crowd. It was the province's first and only government-run cannabis store and Craig McCarthy drove for two hours from Chilliwack to be there, arriving at about 2 a.m.

He has been smoking cannabis for 20 years and normally purchases a form known as shatter from an illegal dispensary. He said he'll buy marijuana online from now on instead of purchasing illegally.

"I'm just happy it's finally here," he said. "It'll absolutely change my life. It's like a feeling, a weight lifted off your shoulders, when you're constantly hiding it to a degree."

— with files from Holly McKenzie-Sutter in St. John's, Laura Kane in Kamloops, Kevin Bissett in Fredericton, Stephanie Marin in Montreal, Steve Lambert in Winnipeg, Chris Purdy in Edmonton, and Michael Tutton in Halifax