Several cannabis companies have recently sent emails to their customers, telling them there has been a shortage of cannabis flower, the plant material used to roll joints.
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“We are currently facing a flower shortage in the state due to limited product availability from our suppliers,” reads an email sent this month to customers of cannabis retailer Fine Fettle, which runs five cannabis retail outlets in Connecticut. “We are doing everything we can to get more flower products from them and stock our shelves, but we also know that this problem won't be solved overnight.”
Fine Fettle is by no means alone. The Botanist, which runs three cannabis retail outlets in Connecticut, sent a similar email to its customers, saying: “We are writing to inform you about a current challenge that we are facing statewide — a product shortage that has impacted our inventory levels."
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"The shortage is a result of a statewide issue affecting all dispensaries, and we want to clarify that each dispensary, including ours, is allocated the same amount of inventory," the email states.
Department of Consumer Protection spokesperson Kaitlyn Krasselt confirmed that there has been a “limited variety of certain products,” which she attributed to “natural fluctuations in supply and demand.”
“The limited variety was exacerbated by increased demand over the holiday season, from Thanksgiving to New Year’s,” she said. “Retailers experienced heavy traffic in relation to the holidays, and the record sales in our December data supports that.”
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Two years ago, the state Social Equity Council approved 28 cannabis cultivators to grow the plant. Only one has opened under the program, with a total of six fully licensed growers now operating in the state. That smaller-than-expected number of cultivators now operating, coupled with higher-than-usual holiday demand, resulted in a cannabis shortage, industry insiders say.
Fine Fettle COO Ben Zachs said while there was an increase in demand over the holidays, it was not as much as there might have been.
“December generally in legal markets sees a 10 to 15 percent increase in sales. Connecticut saw about a 3.5 percent increase,” he said. “There was demand. We think sales could have been higher had there been more flower supply. This is also not unexpected.”
Rodrick Marriott, director of drug control at DCP, said earlier this month that “We have added a lot of new businesses and have maybe stretched our supply a little thinner.”
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“We’re hoping we’re going to have some new cultivation come online in the coming months, early in ’24 to help alleviate some of those concerns,” he said.
There are currently six cannabis cultivators in the state with products on shelves. Of those, four have been producing cannabis since Connecticut was a medical-use only state. Another is considered a “micro-cultivator,” a category reserved for small-scale cannabis farms.
Of the 28 cultivators approved in 2022 by the state’s cannabis Social Equity Council, 11 paid the $3 million license fee. Only one has been granted a final license and has been producing cannabis.
“Rodeo Cannabis Co. currently operates a 250,000-square-foot canopy,” said Rodeo CEO and former state senator Art Linares. “Our ability to open and operate quickly can be attributed to our dedicated and hardworking team that was able to execute our plans efficiently.”
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With more dispensaries opening across the state, demand has increased, but supply has not increased along with it.
“At the same time, we've had dispensaries open creating more demand in geographic areas in the state,” Zachs said. “There are ebbs and flows of the way the program and market work. But right now, we are definitely in a place where supply is not meeting demand. But that will change over time.”
The situation has created what state Sen. James Maroney, D-Milford, co-chairman of the legislature's general law committee, called a sense of "uncertainty" among potential investors.
"One of the things that we've been hearing is that part of the trouble with attracting investors is some uncertainty about who is going to enter the market," he said. "We would like to make it possible for people and give them other options to raise that money so that they can get their businesses up and running."
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Cultivators approved by the Social Equity Council, commonly referred to as section 149 cultivators, were originally faced with a deadline to apply. When the law creating Connecticut’s legal market was initially adopted, a provision was included mandating that those cultivators had 14 months after approval to pay the $3 million license fee and obtain a provisional license.
The state legislature, however, removed that deadline in 2023. Kristina Diamond, Social Equity Council spokesperson, said there have been discussions about reinstating the deadline.
“You need to figure out how many cultivators will actually be growing the product,” she said. “It's hard to determine the landscape.”
Maroney said there are other proposals on the table as well, among them allowing more outdoor cultivation sites, and allowing a conversion from a cultivator to a micro-cultivator.
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"We do want to look at creating some options and ways for them to get up and running," he said.
Jan 29, 2024
Jordan Nathaniel Fenster is a reporter with CT Insider. He's worked as a journalist covering politics, cannabis, public health, social justice and more for 25 years. Jordan's work has appeared in The New York Times and USA Today in addition to multiple regional and local newspapers. He is an award-winning reporter, podcaster and children's book author. He serves as senior enterprise reporter and lives in Stamford with his dog, cat and three daughters. He can be reached at [email protected].
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