RE:RE:HEY WATCH The numbers I was quoting from Statscan already estimate 60% of houshold expense go to non-medical, unlicensed sources, so there's no doubt that the black market is still the majority. It's not even about how big the pie is, it's about how you slice it. 200 LPs in theory could all simultaneously grow and meet estimates within a market of undefined size, as long as that market is still increasing as a whole. And, as I said before, one LP could still grow share within a shrinking industry of 200 LPs.
Not everybody is perfect at operating a business -- they will overestimate and underperform. It's often difficult to identify hubris, but there's no doubt that, on the whole, you must be very skeptical within speculative sectors like this. One of my main points, is just that you can't assume that because X means Y.
In reality, no, 200 LPs won't all grow and meet their estimates together, but that's obvious. There's too much access to capital, too many business strategies and too many companies trying to vie for the same pieces of the pie -- and too much greed. This is exactly why the only companies I've been paying attention to in this sector (which isn't many, I'm not generally super excited about this sector) have given customers a reason to buy their product, other than just price. Price is a plus, but it offers absolutely nothing unique. If price was all that mattered, there would eventually only be one supplier, but it's simply not possible for a single supplier to perfectly serve all different skews of a sector.
I'm not interested in Hexo for the exact reasons that you say you are. Every single product in existence has to trade off quality for cost, to some degree. There is no end to somebody being able to do it cheaper, somehow. Trying to wage war with the black market is totally idiotic, because I can throw some plants out on the back of my property and grow them for next to no cost. You may slowly pressure some of the least efficient illicit growers out, congrats.
Meanwhile, if you operate a fully scaled and licensed operation, to even attempt to turn a profit while pushing black market prices down, you're going be selling product to customers that has taken a more obvious hit in quality. Overall, this actually is a boon to black market sales, and for multiple reasons too.
As black market prices drop from competition, you're giving people even less of a reason to consider changing their source. At the same time, the quality of these, "affordable," products sold in the legal market are going to be turning away both new and loyal customers. This makes it difficult to build a brand and loyal customers.
There's a minimum tier of quality I would want to produce as a licensed operation, and it's around the A-tier of what you'd find in the unlicensed market. Anything less than that is only good in a flash sale to get feet in the door so you can up-sell them on the real products. Having a strong footprint in stores, which comes down to sales, marketing and branding, is more important than anything else. JMHO
Thanks for the consideration,
-Dubby