As popular as cannabis has been over the last 5 to 10 years, it would seem that growers cannot possibly keep up with demand. That may be true in some places, but the supply-demand issue doesn’t prevent the destruction of tons of cannabis crops every year. Yes, cannabis producers destroy what is supposed to be generating revenue for them. They do so for both surprising and unsurprising reasons.
For the record, the problem does not just exist here in the US. Canada’s cannabis industry destroyed some 20% of its 2020 crop. In 2019, they destroyed 15%; producers destroyed some eleven tons of cannabis in 2018. Data shows that the percentage of plant material destroyed each year continues to increase despite Canada fully embracing recreational use from coast to coast.
The reasons for Canada’s cannabis destruction are not unique to them any more than the destruction itself. No matter where you go in the world, there are a handful of common elements creating what is turning out to be a significant problem for the global industry.
Contaminated Plant Material
In the unsurprising column is that amount of plant material destroyed due to contamination. Fungus, mold, and insect infestations are all to blame. Destroying crops for this particular reason is unsurprising given the fact that producers are held to strict standards of purity and quality. Those standards exist in both adult use and medical markets.
Contamination is especially problematic in the medical cannabis arena. Medical grade products have to achieve a higher standard of quality and purity for safety reasons. For instance, you cannot have a patient walking into Deseret Wellness, a Provo, Utah medical cannabis pharmacy, and purchasing cannabis flower contaminated with mold. Contaminated cannabis could be potentially harmful to the patient.
Excess THC Levels
Both hemp and marijuana are regulated in terms of how much THC they can contain, at least in most jurisdictions. If plants contain too much THC, they have to be destroyed. This is a bigger problem for hemp given that, by definition, it must contain less than 0.3% THC.
Going back to Utah for a minute, state law requires that hemp producers keep THC levels below the federal threshold. Selling plants with a higher THC content is illegal. Rather than take their chances, producers will destroy any plants that test too high.
Corporate Saturation
Moving on to the more surprising reasons, a good deal of cannabis product is destroyed as a result of corporate saturation. Corporate investors hoping to cash in big on the cannabis craze are willing to lose money up front in order to profit down the road. As such, they are willing to take investor funds and use them to grow large volumes of cannabis they know they will never sell. The point is to prove they can produce.
This is a big problem in states like California and Colorado. The market in both states is gradually turning corporate. In the meantime, corporate involvement is producing far too much waste.
A Strong Illicit Market
Last but not least, the illicit market continues even in jurisdictions that legally recognize adult use. Illicit growers and processors would rather sell their products directly to the public than go through licensed and taxed government avenues. As long as the illicit market remains strong, producers in the legal market will be left destroying some of their crop.
A lot of companies are hoping to make big money in cannabis. Some are, but they are also destroying quite a bit of crop at the same time. That is not going to change until market equilibrium is achieved.
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