Canadians legalize cannabis, but they may not have enough

PHOTO: An employee with medicinal marijuana plants in the flowering room at Tweed INC. in Smith Falls, Canada, Dec. 5, 2016. PlayLars Hagberg/AFP/Getty Images, FILE
WATCH Marijuana becomes legal in Canada

Justin Trudeau promised to legalize marijuana in Canada when he campaigned to become prime minister.

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At midnight Wednesday, the Cannabis Act becomes law, as Canada becomes the first G7 Nation to legalize recreational marijuana.

Medicinal use of the drug has been legal in Canada since 2001. Now it's up to each of the country's 13 provinces and territories to determine where and how weed is sold and distributed.

As with any nascent industry, especially one straddling the public and private sectors, there are potential hurdles to clear.

One of those may be having enough pot.

PHOTO: Canadian Prime Minister Justin Trudeau reviews the honor guard at a welcoming ceremony in Yerevan, Armenia, Oct. 12, 2018. Hayk Baghdasaryan/Photolure/Reuters
Canadian Prime Minister Justin Trudeau reviews the honor guard at a welcoming ceremony in Yerevan, Armenia, Oct. 12, 2018.

"There will be shortages," Bruce Linton, CEO of Canopy Growth, told ABC News. Canopy became the first cannabis company in North America to be publicly traded when it was listed on the Toronto Stock Exchange in 2014. "There's been pent up demand for nine decades of prohibition."

Aphria, the third-largest Canadian cannabis company by revenue, alerted investors that it's facing short-term supply-chain issues and will not be able to meet demands ahead of Wednesday.

PHOTO: An employee with medicinal marijuana plants in the flowering room at Tweed INC. in Smith Falls, Canada, Dec. 5, 2016. Lars Hagberg/AFP/Getty Images, FILE
An employee with medicinal marijuana plants in the flowering room at Tweed INC. in Smith Falls, Canada, Dec. 5, 2016.

There was a feverish gold-rush mentality when the law passed, and many companies hit the ground running, analysts said. However, not all of them will have the logistics and infrastructure in place to deliver enough weed to customers, especially early on.

"Investors should be warned," said Nikolaas Faes, an analyst at Bryan, Garnier & Co. "There are largely valued companies who don't have contracts with the local governments and provinces. Others are low on inventory. There will be shortages at the beginning because they won't be able to deliver enough product, and the companies who can will gain market share."

Of the 40 or so major cannabis companies in place, Faes predicts about a quarter will survive.

PHOTO: A woman waves a flag with a marijuana leaf on it next to a group gathered to celebrate National Marijuana Day on Parliament Hill in Ottawa, Canada, April 20, 2016. Chris Roussakis/AFP/Getty Images, FILE
A woman waves a flag with a marijuana leaf on it next to a group gathered to celebrate National Marijuana Day on Parliament Hill in Ottawa, Canada, April 20, 2016.

Weather permitting, Canopy's Linton said he will celebrate the historic event at one of Canopy's Tweed marijuana stores in St. John's, Newfoundland.

The location is significant because it sits across the street from the historic St. John's Court House, he said.

"There were over 100 marijuana cases prosecuted there," he said.