LP Cannabis Shortage Inevitable

The Liberals are quite adamant that the goal of legalization is to “stamp out the black market.” What they mean by “stamp out” is anybody’s guess, but it doesn’t sound too great.

The Liberals have claimed a special spot for “small growers” in the Cannabis Act. There is a provision for 4 plants per household, and the task force even recommended legalizing sharing.

Home-growing and “sharing” (wink-wink) will create all sorts of loopholes and workarounds for people already used to ignoring cannabis laws. And they’ll need these loopholes, for Liberal legalization is cultivating cannabis shortages.

It is the same problem the Soviet Union was tasked with. Given the infinite complexity in the economic options one can take, how do you know which is the right course of action?

Individuals in private enterprise have competition. They have the price system which originates from mutual trade, through the discovery of value.

Confiscation is categorically different from free trade.

Since the Liberals are running a tax-funded monopoly, they too will face the supply/demand problem that plagues every statist regime.

Many people intuitively understand this. Or see it right before their eyes even when it has yet to materialize.

Aaron Salz is an investment analyst on Bay Street. He is a consultant to some of the larger licensed producers. Salz said: “We are going to have a supply shortage. I’m highly confident of that.”

Since taking over the government, the Liberals have yet to dismantle the LP-scheme. The safety and security codes (borrowed from a nuclear power plant design template) still apply. However, tweaks have been made so the current LPs can expand easier.

Still, cannabis consultant and investor Paul Rosen says, “I think we will be critically short.”

There are more Canadians that want to buy cannabis than the LPs can produce currently or even by July 2018.

Of course, this has never been an issue in the “black market,” where, for the last couple decades, consumers have more-or-less ruled. Cannabis entrepreneurs have crowded out most of the gangs. The rules are unwritten, they have developed organically over time.

Now, all that needs to be done is the legalization of this existing market.

The uproar over the LPs and Harper’s original overhaul of the medical regime was the fact that he ignored this BC Bud market.

He tried to physically remove $5 billion from the BC economy and replace it with Ottawa-connected pot producers. Kind of like what Pierre Elliot Trudeau did with Alberta oil.

Now, it’s Justin’s turn.

He may have lifted the boot slightly, but the heel is still pressing hard. Perhaps he’s cool and is just moderating his message for the base, bro, calm down, brah, be patient… Perhaps the government will eventually respect the “small growers” by decentralizing control, even if it means successive battles after the initial Act is given Royal Assent.

Either way, markets always prevail.