RE:RE:RE:Easy BuyMagicBeans wrote:
1. The level of competition for customers is excessive. No matter what company investors prefer, less face it, there is going to be too many licenses granted by HC. HC is the poop in investors ice cream
As lovely as this analagy is, I would argue that HC has been quite diligent in not saturation the market with licences. There is nothing to show that this will be different as the industry grows. If anything they are getting more flack for being too slow on MMPR licences. Heck just visit the SL board for a daily taste 'final approval' angst.
MagicBeans wrote:
2. BED is going to be a high cost producer that will be challenged by the cut throat competitors. Their facility will cost more to run and build than some of the other LP's because of the location they choose. It will be difficult to compete on a price basis with those suppliers granted licenses who will try to garner market share with low prices.
BED has the lowest cost per yeild harvest due to refined processes. GTA might not be a good place for hydro like OGI has in Moncton, but they can certailnly compete with their price point. Plus the GTA local may bring in more local clients then people expect. Time will tell.
MagicBeans wrote:
3. There is more than one company that will know how to grow weed. You yourself sound very capable of growing some weed and there is other experts besides Bedrocan. They do not monopolize the expertise required to grow a crop.
But are there other companies that can produce consistant dosages per gram as Bed? No. Are there other companies that can produce research ready placebo product? No. Are there other companies that have patented genetically modified strains that only they can use? No.
Other companies can grow pot. Other companies cannot grow Bedcocans pot. Research on MMJ is going to be happening soon, by many different organizations. Bedrocans product is the only one suited for proper research testing, and this will be a revenue stream others miss because of that.
MagicBeans wrote:
4. With a fractured market place and a long runway to reach full legalization, many or all of these early plays will require going back to the honey pot for money to fund their operations. Not enough revenue to share amongst a growing list of suppliers will make profitable operations difficult. More dilution and share offerings should be expected.
Bedrocan is the furthest along to reach cashflow positive, and they havent even built out the facility. They have done this in several contries over and over. They know what to expect in the future better then anyone when it comes to costs with building out.
MagicBeans wrote:
5. Time is not a friend to MJ startups. There will be many years of wandering the desert before a large enough market will justify the number of companies with licenses to grow. Full legalization for the tiny Canadian market is a very long ways away and investors will get fatigued along the way and many buying opportunities will arise through the years. The stock price erosion of BED is symptamatic of early investor fatigue.
With the Feb injunction potentially opening up tens of thousands of MMPR eligable clients in one decision, that would give the industry a well needed boost of clients just as production is ramping up, and capable of supporting them. The election in 2015 will also be a catalyst for exponential client growth should the Liberals win. If you want to wait for the win first, you will have missed the boat as SP will probably explode the next day.