On October 17, 2018, the Canadian government legalized cannabis. The federal government left it up to the provinces to figure out distribution but it seems like no one really did the marketing calculations right.
In Ontario, for example, orders are going unfilled despite a move to throttle demand by limiting distribution until next April.
The province decided to use their website as the only way for consumers to purchase for the first six months. The launch was also staged in the face of a potential post office strike.
At the same time, established dispensaries have been declared illegal and are being closed down.
These factors should have limited customer access and concentrated demand. Nevertheless, reports suggest that there is not enough product to satisfy the latent demand that existed. Shipments are being delayed and cancelled due to lack of product.
The market demand should not have come as any surprise. The opening of the Colorado market should have been an indicator. Survey information should also have given a clear indication of the size of the demand and what to prepare for. This problem will be further exacerbated by the production time required to go from seed to finished product and to expand greenhouses needed to grow product. Even if existing greenhouses were re-purposed, we must wait for all the vegetables to finish their cycle.
We experienced a similar shortage problem when we introduced Canada Dry Ginger Ale to Venezuela. The bottler wasn’t ready for the demand that the advertising created. They never recovered.
Consumers thought that the advertising was not real and were unsure whether the product was actually available. Interest waned rapidly.
When Calexis introduced Woods socks for Harvey Woods, we encountered a similar problem. The advertising was simply way more effective that expected and there was not enough product to satisfy the demand. Major department stores were sold out.
The client also chose that time to move their factory. One major department store liked our advertising and wanted to post it on their escalator walls but later decided not to as there was no more product.
Marketing’s job is not just to create demand; but, to match that demand with available supply. When you fill the pipeline that delivers the product, you have to know, as best you can, that the consumer will be using up the product as more enters the pipeline.
It sounds like government got into marketing, without having real marketing people helping them out. Gearing up to launch a massive market is no easy feat.