Hold Up: Health Canada is Reporting 1,300 Units of Cannabis Stolen Since 2018
You Read That Right
somehow, Health Canada is reporting 1,300 units of cannabis stolen since 2018… and producers are coming out to say that they’re accounting for over 2,200 kilograms (4,870 pounds, for all of our American readers!) of missing cannabis products within that same time frame.
So what’s going on here? Let’s dive into the data.
Losses and Thefts of Canadian Cannabis Since 2018
A Health Canada spokesperson has announced that they are aware of over 4,398 instances of lost or stolen cannabis–at least, that was reported–to police between 2018 and 2022. However, it was also stated that the outcomes of investigations into these losses haven’t been reported to them.
While this is partially chalked up to the ever-increasing amount of marijuana products being shipped across the country, David Hyde, CEO of Hyde Advisory & Investments based out of Toronto, says that one strong commonality links most of these losses together: transit.
“I believe a lot of the sources of these losses–not at all, but probably more than half–has a nexus to transit: whether it’s from the loading dock of the LP, whether it’s after the cannabis gets moving from A to B, or whether it’s on the receiving end of the other party’s loading dock,” he said in an interview with MJBizDaily. “That’s the narrative that I see here: more LPs, more movements–ergo, more thefts.”
This assumption isn’t unfounded: just one example of his point in action is Aleafia Health in Ontario being robbed of an entire shipment of their cannabis from their third-party carrier facility.
What Does This Mean for the Cannabis Industry in Canada?
So what exactly has been going missing?
According to the stats, here is the officially-reported breakdown since 2018:
- Approximately 1,352 units of marijuana were reported as lost or stolen (which includes edibles)
- Approximately 195 litres of cannabis products went missing (including, but not limited to, bulk isolate, bulk distillate, and other liquid forms of cannabis)
- Approximately 4,421 losses or thefts for general cannabis products have been submitted by producers to Health Canada
- In the first year of adult-use sales alone in 2018 upon legalization, producers filed 199 reports of missing or stolen products in two-and-a-half months alone
- In the first full year of adult-use sales in 2019, that number leaped to 889 reports and further climbed to 1,313 reports by 2020
If left unchecked, these steadily-rising reports of thefts and losses could yield further security issues and, at worst, financial losses that legal producers may find insurmountable. This is especially true due to Health Canada’s regulations regarding reporting unexplained losses and thefts, which they dictate have to be investigated internally by the producers vs. receiving help from Health Canada or other governing bodies.
“If you ask me,” Hyde concludes, “when Health Canada is doing their adults and different things, [their staff] should be probing a bit more into transit, into the distribution of cannabis before it hits the provincial distributor, and when exactly it becomes a provincial issue. There should be more prescription around transit–even if it’s a guidance document–to establish security guidelines and expectations.”
What are your thoughts about these stats and Health Canada’s instructions regarding reporting thefts and losses, readers?
I disagree with Mr Hyde\’s perspective. Not to say that items don\’t get stolen during shipment, because they do. However, we need to remember that inventory is counted before shipment and upon receipt at each delivery point before it\’s accepted by the receiver. In addition, the packages have seals that cannot be broken until receipt. Further to that, cannabis stores have cameras that record all inventory as its received and counted, Therefore, items being stolen during delivery is less common because the risk of being caught is too high.
In my experience as a cannabis retail store owner, the stolen cannabis can mostly be attributed to external theft via break-ins. It\’s rare to speak with another retail owner in the industry who has not had a break-in and or theft. In the summer of 2022, after a break-in, my store lost 40-50 units of inventory worth approximately $1,500.
Internal theft from employees is certainly responsible for some of the losses as well. But employers often catch internal theft due to the cameras and inventory tracking systems in place.
The good news is that we can see the number of stolen items trending down year-over-year in the data released. I believe this downward trend will continue for a few reasons. The resale value of stolen legal cannabis may be less than expected. It may also be difficult to move. Stores are also implementing additional security measures, such as metal gates, baring windows and doors and implementing stronger prevention procedures.