RE:Thinking out loudI agree with you and would like to see CGC increase capacity with a modular hybrid greenhouse model like ACB is moving towards. It looks like it will be the most productive per square foot. I'd rather they build out on their own than aquire space as it looks far cheaper at this point and they can build according to what they've learned so far at Tweed Farms and Smith Falls to maximize productivity and efficiency.
starsearcher40 wrote: If you add up the capacity of the current LP's, I think what you'll find is that it is vastly less than what the demand is going to be, including both the medicinal and rec market. This has the potential of causing a big problem for Health Canada, as it would be pretty bad pr to roll out some program, and then people can't get what they want/need, simply because the supply chain wasn't adequately considered.
Then factor in the time it takes to ever qualify to become an LP (even if HC were to want additional LP's), and then the time for them to actually ramp up into any kind of build, or growing learning curve, or funding, or, or or, ...and the reality is that there's going to be a timing issue to meet demand.
So thinking out loud, is this a problem or an opportunity for CGC?
I tossed this around in my own head for several weeks now, and I've come to the conclusion that it's an opportunity. Here's my thoughts.
1) CGC's current/proposed/approved build out is already massive, and should have the company profitable within the next 2 quarters. (my on math on that one). This will be in ADVANCE of rec, and will position them very well to turn a profit,
2) What I think will happen (and this needs to happen soon) is that HC needs to recognize the need for greater capacity, and the quickest path for them will be to go to existing LP's and let them build out further, leading to even greater profitability. The existing LP's (CGC being one of them) will be able to fast-track approvals, using existing templates/blueprints that have already passed HC approvals. In essence, it helps to solve a capacity problem that I think HC is going to have, and favours LP's that have already "paid their dues" in the approval process that realisitcally has taken a couple of years. In essence, it will give CGC a well-earned advantage.
As big as CGC already is, I have no problem if they pursue a course of adding additional capacity. I think that there may be a lot of merger/acquisition to come (industry wide), as not all LP's are going to survive/thrive. However the increased capacity comes, when it comes, motivated through HC recognizing they're going to have a problem, CGC is well positioned to take advantage. They have cash on hand via the bought deal, and soon to turn a profit on exisiting capacity. It doesn't get any better than that.