Post by
dmacd on Feb 10, 2019 1:04pm
Cannabis Supply Rates
Oversupply will be the theme for the smoking variant of cannabis. The companies that have medical products that are well recognized and effective will have better margins until the players who caused the oversupply to be put out of business or unless these early movers will be able to effectively capitalize on new markets opening up. My bet is on the latter and hence I will remain invested for say 3 to 5 more years and then at some point the oversupply will be problematic as the suppliers will overfill the market and then consolidate as with all other booms. Here is a foreshadowing of what can happen in the near term if markets do not open fast enough. My bet is the earliest producers will win the battle since they will have cashflow and the others will be out of business before they get started and the late comers investors will take a bath.
I am not sure if Aleafia is able to move quickly enough on the smoking side but they had better up their game, and Enwave is a part of that. Why dry the product for 5 or 6 days when you can dry it in an hour and control the medicinal effects more closely and save on labour. If they share in the development costs with Tilray for the smoking side then they might get a lower royalty deal. I think anyone drying the old fashioned way is going to have higher costs and will be in a more difficult way when the squeeze happens.
Oregon has a 6 year oversupply:
https://www.opb.org/news/article/oregon-cannabis-surplus-2019/
Comment by
Mamalikespie on Feb 12, 2019 1:08pm
Apparently 30% of all california sales are vape fluid. Makes sense given how things are going.