The cannabis flower shortage that is impacting the healthcare of hundreds of patients across Australia will happen again until more local product becomes available, the chief executive of Cannatrek has warned.
As the Victoria-based firm released its first range of home-grown flower, Tommy Huppert said the ‘exponential’ surge in demand, coupled with crippling import delays from Canada and other Covid-related issues, have created the ‘perfect storm’.
“It’s almost been a total wipe out,” he told Cannabiz.
The comments came after Cannabiz last week revealed how the paucity of flower is threatening to derail the health plans of many Australian patients.
Several posts on a medicinal cannabis Facebook group have expressed concern at the shortage, with patients scrambling to source suitable, alternative product.
Some patients reported being prescribed three different flowers, all of which were later found to be unavailable.
Additionally, it is believed the near-32% spike in SAS-B approvals in February – which saw the Therapeutics Goods Administration sign-off an unusually high 8,000 prescriptions – was partly due to doctors seeking reapprovals for alternative flower products after patients and dispensing pharmacists ran into supply issues.
Yet there is hope the situation could improve.
Cannatrek said the release of its first batch of home-grown flower should ease the shortage, while both Bedrocan and MedReleaf said they too have product available.
Cann Group, meanwhile, confirmed that plants earmarked for extraction will be made available as flower to help combat the shortage.
According to Huppert, the shortage was triggered by a sharp increase in demand which coincided with regulatory delays in Canada – where most of Australia’s dried flower originates.
“Health Canada hasn’t issued 2021 permits, and it’s now the middle of March, so the whole industry is stuck,” he explained. “The permits expire on December 31, and there has been such an increase in demand that the whole industry has been wiped out. There has been a near sell-out of inventory.
“It happened a couple of times early on, maybe a couple of years ago, but the exponential growth of the market plus the exponential growth in the uptake of flower – we are talking three times, even four times in the last three months – is massive.
“I feel we could go through similar motions for the next while until more growers like us come into the supply chain.”
Even regular increases to Cannatrek’s order book from overseas suppliers failed to keep pace, Huppert said.
“We saw the market was growing so you prepare more inventory,” he said. “Three times we increased our orders and we still ran out of a few lines.
“The good thing is that we didn’t run out of inventory, but we did run out of a few lines.
“We went from six to a couple of strains.”
For the past two years, Cannatrek has imported from Colombia, Canada, US and Israel, with flower accounting for more than half of its sales.
But Huppert said Cannatrek’s imported supply will now be “replenished with local product”, cultivated at its Queensland facility.
Huppert recognised the angst felt by consumers who must go through the process of a new approval if the first choice is unavailable and the alternative is manufactured by a different company – even if the product is largely identical.
“Even within a company we might have the same product with a different strain, and it’s actually another approval,” he said.
“I hope that bottleneck is removed and we get support from the doctors and the clinics to be kind and not hit [patients] with massive charges to approve the same medication, but which has a different label.”
Cann Group chief operating officer Shane Duncan agreed that the root cause of the shortage appeared to rest with export delays in Canada.
“That’s our understanding,” he said.
“We’ve got flower that we allocated for extraction, but it meets the specification for an inhaled product so we can make that available for dried flower which is what we have started doing.
“We’ve reached out to a few groups and had a good response. Essentially we’re pushing it through a different production pathway rather than extraction.”
The Cann Group flower comes from the first commercial crop of a new cultivar. With another two crops expected over the next few weeks, Duncan said there should be a “reasonable amount of material for the next two to three months”.
Along with the import delays, Duncan said flower has seen rapid growth in recent months – albeit off a low base – with the number of enquiries rising “three of four fold” since late last year.
“Before then flower was probably 1%-2% of the market. It’s hard to tell what it is now, but it’s more than that. If I go by the crude numbers of people who are making enquiries, it’s probably 5% to 10% now.”
Cannatrek’s Huppert put the rising popularity of flower down to its efficacy and the familiarity of inhaling cannabis among illicit users who, potentially, are switching to legal channels.
“We believe cannabis inhalation has worked, we’ve seen results on mental and physical pain and it’s the fastest acting product,” he said.
“There are also more people coming into the system, potentially moving away from the illicit market to the legal market, who were previously inhaling and self-medicating.”
Despite the shortage, some companies insisted they were not struggling with supply.
Nathan Davis, executive director and head of strategy and business development at MedReleaf, said its range of dried products “are in full supply and are available to any GP to prescribe”.
“MedReleaf Australia is fortunate to have a strategic partner that is the market leader in the Canadian and global medical market, aiming to provide consistent supply of EU-GMP cannabis medicines to our Australian patients,” he said.
“Demand has certainly increased for our products by Australian doctors looking to provide an optimal and consistent outcome to help their patients quality of life.”
Bedrocan also said the shortage was not affecting its products.
“We have a few weeks of stock of Bediol, however we have around 2-3 months of Bedrocan available and no issues with getting more,” cannabis products manager Andrew Heath said.
“We have a shipment arriving in the next 1-2 weeks and another in around six, so all is fully under control as far as supply goes.
“I know some other products are facing shortages, and we have seen an increase in demand over the past few weeks, but we are well placed to continue to provide products with no interruption to supply into the future.”