Marijuana prices falling in Canada before legalizationI know I'm going to get attacked for posting this but it's true. Marijuana retail prices are going to drop big time after legalization. You can pull the wool over your eyes if you want but it won't change anything. Weed is not worth $5 or more per gram. Those prices only exist because of prohibition.
https://www.bnn.ca/marijuana-prices-falling-in-canada-before-legalization-1.978931 Weed is not expensive to grow and in a few years large outdoor farms will be the norm. Tweed Grasslands is an example of this. There will be many more. There are currently quite a few large-scale hemp farms in Canada. My family actually grows hemp in Alberta. An, yes I know the difference between hemp and marijuana.
Currently companies are planning to use outdoor-grown weed for oils and extracts since you don't need good quality buds for that. Eventually, mass-produced outdoor weed will make its way into cheap cigarette style products that will be available everywhere.
In a few years wholesale weed will go for less than $1/gram. That's just a fact. Keep that in mind in your valuations. Since we're speculating on the future of Canopy it's important to have an idea of what it might one day be worth.
Bruce was on BNN yesterday with an estimate that the entire Canadian weed sector will be worth $8 billion after legalization. I'm not knocking here but he didn't have anything to back that up. That was in resposne to Stats Canada's estimate that the market is worth $5.7 billion which is also a very loose estimate. These estimates are based on $5/gram which isn't realistic.
https://www.cbc.ca/news/business/marijuana-industry-1.4503152 Just to be clear I'm not bashing. I love Canopy, I love the story and they are making all the right moves. I was an investor literally from day 1 on the IPO. There is no way that they are worth over $6 billion dollars though.