RE:HEXO will sell 100% of his production for sureelectriqueman wrote: https://www.tvanouvelles.ca/2019/01/10/la-penurie-de-cannabis-pourrait-setirer-sur-3-ans
Bing translation below;
Cannabis shortage could stretch over 3 years
Pierre Couture | Posted on January 10, 2019 at 14:45
The shortage observed in the Quebec Cannabis Society (SQDC) stores could last another three years, experts say.
"Personally, I think we still have three years to find a real balance," said the newspaper boss of the investment firm Auxly Cannabis Group in Toronto, Chuck Rifici.
According to the latter, who was participating in the AltaCorp Capital conference in Toronto a few days ago, the Canadian cannabis industry will remain under pressure for a number of years due to strong consumer demand across the country.
Empty shelves since the end of October, the shelves of the 12 SQDC stores are virtually empty. The SAQ subsidiary has even been forced to reduce the hours and days of opening of its stores to limit the access to customers.
"For producers, there is a high risk of execution while an emerging industry is being asked to move their production very quickly from 5 to 10 times," he suggested.
Chuck Rifici is not the only one who thinks the cannabis industry will be full of them over the next few years.
Several major investors believe that the industry will have to adapt to demand and that it takes time and patience.
The president of Organigram Holdings, Greg Engel, and the Vice-President of the firm Valens GroWorks, Everett Knight, also believe that it will take two to three years to respond adequately to the demand of the Canadian market.
However, an analyst who follows the cannabis sector for a major investment firm contacted by the newspaper is not of that opinion.
"I don't think it's going to take three years. It's going to be very difficult by the end of 2019. But I think it might unlock later. We will see the prices drop, he said.
According to the C.D. Howe Institute, cannabis production in the country will be able to meet only 38% of the demand over the next 10 months.
Missing results This cannabis shortage has a direct impact on the financial results of the major producers on the Toronto Stock Exchange.
For example, Ontario producer Aurora reported on Tuesday that its second-quarter revenues will be below analyst expectations.
Aurora now expects to report revenues between 50 and $55 million for the quarter rather than the expected $75 million.
"It is expected that each licensed producer will now be confronted with the growth of an emerging industry by overcoming post-production bottlenecks," said analyst Martin Landry of GMP Securities in a note Research published to investors on Tuesday.