Returned product a hidden challenge for cannabis companies

TORONTO — Soon after cannabis products started flying off shelves following legalization, Canopy Growth Corp. had a $26.9 million problem.

The Smiths Falls, Ont.-based company told investors and analysts during a November conference call to discuss its financial results that it was grappling with $20.5 million worth of product being returned from provincial retailers and bracing itself for another $6.4 million worth that was on the way.

In the previous quarter it had taken an $8-million writedown for unsold oil and gel caps.

The incidents are a peek into the little-discussed world of cannabis returns, where products are sent back to companies over everything from lack of sales to consumer complaints and quality concerns. Because companies and provincial cannabis distributors track returns differently and don’t always disclose data, it’s hard to know how common returns are, but experts say returns are more often an issue between retailers and wholesalers than consumer complaints.

Tara Deschamps
The Canadian Press
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