Business
Canadian growers destroyed a record 425 million grams of cannabis last year
Canadian licensed producers have destroyed a growing amount of cannabis every year since adult-use legalization nearly four years ago, with 2021’s record quantity far exceeding the product sold that year, an MJBizDaily analysis has found.
The latest data signals that some Canadian mass-producers might need to further rein in output to bring it more in line with forecasted sales, after years of trying to rightsize capacity so they’re not growing more than they’re able to sell.
All told, Canada’s federally licensed marijuana producers destroyed a record 425 million grams – or 468 tons – of unsold, unpackaged dried cannabis last year, according to Health Canada data provided to MJBizDaily.
Last year’s total was up more than 50% from the 279 million grams of dried cannabis that was destroyed in 2020. LPs destroyed 155 million grams in 2019.
Seattle-based analytics firm Headset estimates that sales of dried cannabis and pre-rolls amounted to 293 million grams last year in four key provinces, indicating destroyed inventory again exceeded sold production.
Headset monitors sales in Alberta, British Columbia, Ontario and Saskatchewan, which together account for approximately three-quarters of all legal sales of recreational marijuana products in Canada.
In addition to the destruction of unpackaged dried cannabis, more than 7 million packaged cannabis products across the country were sent for destruction in 2021, according to the Health Canada data.
Quantities of destroyed cannabis include:
- 3,576,232 packages of dried cannabis.
- 1,118,148 packages of extracts, including vapes.
- 2,421,823 packages of edibles, including beverages.
- 15,359 packages of topicals.
Headset tracked cannabis sales of 104 million packaged units in 2021 – indicating that, unlike unpackaged dried cannabis, sales of packaged merchandise far exceeded the amount that was destroyed.
The Health Canada data does not include the weight of the packaged production.
Widespread destruction
Destruction has been growing in Canada’s young cannabis industry after the largest producers funded and built out more production capacity than the industry needed after the launch of recreational sales in October 2018.
Most of the biggest greenhouse transactions led to direct real estate losses worth millions of dollars and “balance sheet adjustments” worth billions of dollars in inventory and other asset write-downs, previous MJBizDaily reporting found.
In fact, cannabis producers in Canada sold less than 20% of their production between legalization in 2018 and the end of 2020.
Since 2018, almost 900 million grams of unpackaged dried cannabis has been destroyed by licensed producers because of overproduction and quality issues – a weight approximately equal to 650 Toyota Prius cars.
That figure would easily pass the 1 billion-gram mark when destroyed packaged marijuana is accounted for.
Bloated balance sheets
Stewart Maxwell, a cannabis crop consultant based in British Columbia, said some large producers might be putting off destruction to make their balance sheets look better than they really are.
“I think some of the larger producers just want cannabis in their inventories. Even if they never sell it, it still looks good on your books to have assets,” he said.
“A lot of producers aren’t destroying products when it’s ready to be destroyed, even though it’s no longer marketable.”
Across all product categories in Canada, the amount of packaged product sitting in corporate inventories far exceeds the amount of packaged merchandise that is sold.
That imbalance indicates that high levels of inventory destruction could continue for some time.
In December, for instance, 14 million packaged units of extracts were stashed in inventories of producers, wholesalers and retailers.
In the same month, sales amounted to less than 3 million units in recreational and medical channels.
Roughly 19 million units of cannabis edibles were packaged and ready for sale in December. Only about 4 million units were sold, according to government data.
Cannabis topicals inventory reached 550,000 units, compared with sales of 65,000 units.
Meanwhile, roughly 36 million packaged units of dried cannabis were in inventory that month, with sales reaching 9.6 million units.
Packaged cannabis destroyed in Canada by product type
| Product type | 2020 | 2021 | Percent change |
|---|---|---|---|
| Dried cannabis units | 2,642,779 | 3,576,232 | 35.32% |
| Cannabis extracts units | 1,337,364 | 1,118,148 | -16.39% |
| Edible cannabis units | 714,485 | 2,421,823 | 238.96% |
| Cannabis topicals units | 943 | 15,359 | 1528.74% |
Showing 1 to 4 of 4 entriesSource: Health Canada
The imbalance primarily lies with licensed producers, not wholesalers or retailers, the Health Canada data suggests.
Maxwell warned that the overproduction will make life difficult for most new entrants into the industry.
“I’m a crop consultant. I make my living teaching people how to grow more weed. But quite often, my first meeting is uncomfortable,” he said.
“A majority of the time, I’m telling people, ‘I’m sorry, but you’re going to fail.’ And they usually don’t hire me when I tell him that, but that’s the reality if you’re just getting into this industry (now).
“The odds are, even if you are a good actor and you have substantial financial assets behind you, the numbers are not good for anyone. Because of these issues – oversupply. Cannabis can’t find its real price point.”
Demand forecasting
One of the companies navigating Canada’s tumultuous cannabis market better than some of its larger competitors is cultivator Organigram Holdings.
The New Brunswick-based company has managed to grow its overall market share and sales, while most of its main rivals have seen their sales crash and write-downs skyrocket over the same period.
A recent report by New York-based financial services firm Cowen noted that some Organigram rivals experienced sales declines upwards of 39% year-over-year in the second quarter of this year.
Organigram’s sales, by contrast, rose 60%.
How?
CEO Beena Goldenberg said part of the reason is that Organigram sells most of what it produces, avoiding the massive destruction and write-downs facing larger competitors.
“No. 1, Organigram built out our capacity over time. We had mistakes, too. But in the last couple of years, we’ve been producing based on our sales forecast,” she said in a phone interview.
Goldenberg said not overproducing requires a deep understanding of what your customers want to buy and why.
“Like anything else, it’s all about making sure you’re producing what a consumer wants,” she said. “Quality is becoming the determining factor.”
She said markets are stabilizing enough to make accurate forecasts, “and you shouldn’t have massive amounts to write off. You should be working with the provinces on making sure you have an optimized (product) lineup.”
Cannabis is an agricultural product, Goldenberg said, so consumers don’t want something that’s six months to two years old.
“I think we’re performing very well because we have fresh products in the marketplace all the time. It’s not aged six months, nine months,” she said.
Being able to deliver fresh products boils down to three factors, she said:
- Forecast accuracy.
- Measured investments in inventory.
- Customer service.
“In my whole career, not specific to cannabis, it is always (finding) that balance between forecast accuracy and investment in inventory and customer-service levels. You have to optimize those three factors,” Goldenberg said.
She said Organigram is sitting on about three weeks of inventory.
“That is critical to our process,” she said. “We look at what we need, and we produce accordingly.”
Matt Lamers can be reached at matt.lamers@mjbizdaily.com.
Source: https://mjbizdaily.com/canadian-growers-destroyed-a-record-425-million-grams-of-cannabis-in-2021/
Business
EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices
A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.
Investigation Under Digital Markets Act Gains Momentum
The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.
Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.
Industry Groups Demand Swift Action
Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.
Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.
In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.
Google Denies Allegations
Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.
However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.
Potential Billion-Euro Penalties
If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.
Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.
Wider Implications for Big Tech
The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.
A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.
As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.
AI & Technology
Amazon Faces Potential Criminal Trial in Italy Over €1.2 Billion Tax Evasion Allegations
Milan: U.S. tech giant Amazon is facing the prospect of a major legal showdown in Italy, after prosecutors in Milan formally requested a court to move forward with criminal proceedings over alleged tax evasion totaling approximately ₹12,500 crore (€1.2 billion).
The case targets Amazon’s European division along with four senior executives, marking one of the most significant tax-related investigations involving a global e-commerce platform in Europe.
Trial Push Despite Multi-Million Euro Settlement
The move comes even after Amazon reached a financial settlement with Italian tax authorities in December, agreeing to pay around ₹5,500 crore (€527 million), including interest, to resolve part of the dispute.
Typically, such settlements lead to the closure of criminal investigations. However, Milan prosecutors have opted to proceed, signaling a tougher stance on alleged corporate tax violations.
A preliminary hearing is expected in the coming months, where a judge will decide whether to formally indict the company and its executives or dismiss the case.
Allegations of VAT Evasion Through Marketplace Sellers
At the center of the investigation are claims that Amazon’s platform enabled non-European Union sellers to avoid paying value-added tax (VAT) on goods sold to Italian consumers between 2019 and 2021.
Prosecutors allege that the company’s marketplace structure allowed thousands of foreign vendors—many reportedly based in China—to operate without fully disclosing their identities or tax obligations. This, authorities argue, led to substantial VAT losses for the Italian government.
Under Italian law, online platforms facilitating sales can be held partially liable if third-party sellers fail to comply with tax requirements, a key point in the prosecution’s case.
Italian Government Named as Affected Party
In their filing, prosecutors identified Italy’s Economy Ministry as the injured party, citing significant financial damage resulting from the alleged tax evasion.
Legal experts say the outcome of the case could have wide-ranging implications across the European Union, where VAT systems are harmonized and similar compliance rules apply to digital marketplaces.
Multiple Investigations Add to Pressure
The VAT probe is just one of several legal challenges facing Amazon in Italy. The European Public Prosecutor’s Office is reportedly examining additional tax-related issues covering more recent years.
Meanwhile, Milan authorities are pursuing separate investigations into alleged customs fraud linked to imports from China and whether Amazon maintained an undeclared “permanent establishment” in Italy—potentially exposing it to higher tax liabilities.
In a separate regulatory action, Italy’s data protection authority recently ordered an Amazon unit to stop using personal data from over 1,800 employees at a warehouse near Rome.
Amazon Denies Allegations
Amazon has consistently denied wrongdoing and indicated it will strongly contest the allegations in court if the case proceeds. The company has also warned that prolonged legal uncertainty could impact investor confidence and Italy’s appeal as a destination for international business.
Broader Impact on Europe’s Digital Economy
If the case moves to trial, it could become a landmark moment for the regulation of global e-commerce platforms in Europe. Governments across the region are increasingly scrutinizing how digital marketplaces handle tax compliance, especially in cross-border transactions.
With online retail continuing to expand, regulators are under mounting pressure to ensure that multinational platforms and third-party sellers adhere to the same tax rules as traditional businesses.
Aviation
IndiGo Crisis Exposes Risks of Monopoly: What If Telecom or E-commerce Collapses Next?
Airports across India witnessed scenes of distress and confusion as thousands of passengers were stranded due to IndiGo’s massive flight disruptions. Families with medical emergencies, funerals, and personal crises were left helpless as the airline cancelled hundreds of flights without adequate communication or support.
Passengers described desperate situations — a mother pleading for sanitary pads for her daughter, a woman unable to transport her husband’s coffin, and others stranded while trying to reach family funerals or hospitals. “It was like a lockdown at the airport,” one passenger said, describing the panic that unfolded as IndiGo’s mismanagement crippled operations nationwide.
Root Cause: IndiGo’s Market Monopoly
The turmoil, industry experts argue, stems from IndiGo’s monopolistic control over India’s domestic aviation market. The airline operates nearly 2,100 flights daily and holds around 60% market share — meaning every second plane flying within India belongs to IndiGo.
This dominance has given the company unparalleled influence. When IndiGo falters, the entire aviation system suffers. Passengers are left with few alternatives, as other airlines lack capacity to absorb stranded travellers. The result: skyrocketing ticket prices, chaos at terminals, and total dependence on a single private operator.
Aviation pioneer Captain G.R. Gopinath, founder of Air Deccan, criticised the government’s inaction, noting that on some routes, IndiGo’s economy fares surged to ₹1 lakh. He compared the situation to a hostage crisis, writing that the airline “held the system ransom” and forced regulators to defer new safety rules meant to protect pilots and passengers.
Government Intervention and Regulatory Weakness
The crisis erupted after IndiGo failed to comply with the Flight Duty Time Limitations (FDTL) — rules introduced by the DGCA in January 2024 requiring adequate rest for pilots. Despite having nearly two years to adapt, IndiGo blamed the rule for operational disruptions, citing a shortage of pilots.
Under mounting public pressure, the government stepped in, temporarily relaxing FDTL norms and capping airfare hikes. Officials claimed the move was to protect passengers, but analysts say it exposed the state’s vulnerability to corporate monopolies. “The government had no option but to yield,” said one aviation policy expert, pointing out that ignoring safety regulations for short-term relief could have long-term consequences.
The crisis also rekindled memories of the June 2025 Air India crash near London, which claimed over 240 lives. Experts warn that compromising pilot rest and safety standards to maintain flight schedules could risk another tragedy.
If Telecom Giants Fail: A National Paralysis
The article raises a troubling question — what if a similar crisis struck the telecom sector, where Jio and Airtel together control nearly 80% of subscribers and serve over 780 million users?
If both networks failed simultaneously, the repercussions would be catastrophic. Internet shutdowns would halt UPI transactions, online banking, OTP verifications, video calls, OTT streaming, and emergency communications. Critical services such as airports, hospitals, stock exchanges, and small businesses — many of which rely on WhatsApp and digital payments — would come to a standstill.
In essence, a telecom breakdown could paralyse India’s digital economy, exposing the nation’s dependence on a duopoly.
E-commerce Monopoly: Another Fragile Ecosystem
The same risk looms over the e-commerce sector, where Amazon and Flipkart dominate nearly 80% of the market. A disruption similar to IndiGo’s could cripple daily life — halting delivery of groceries, medicines, and essential goods, freezing refunds and customer support, and leaving small sellers without platforms to trade.
Local retailers, freed from competition, might exploit shortages by inflating prices. Such a scenario underscores the perils of market centralisation in sectors critical to everyday living.
A Wake-Up Call for Regulators
The IndiGo crisis, analysts say, is a warning shot for policymakers and regulators. A single company’s operational failure exposed systemic weaknesses in India’s infrastructure and consumer protection mechanisms.
As the aviation regulator DGCA investigates and IndiGo works to restore normalcy, the broader lesson remains clear: unchecked monopoly power in any essential service — whether air travel, telecom, or e-commerce — poses a direct threat to economic stability and citizen welfare.
Without stronger competition laws, redundancy frameworks, and regulatory oversight, India risks repeating this crisis across multiple sectors — each time with millions of citizens paying the price.
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