Capacity utilization rateI am stunned that almost everybody here thinks that any weed company will be able to have a capacity utilization rate of 100%. Novice investors and speculators jump in when they see news mentionning any capacity expansion, but they don't ask themselves whether this additional capacity is worth it (i.e. if the company will be able to sell everything they produce). Capacity utilization rate for Tobacco companies is about 55% to 65%. There are so many weed companies out there, I wouldn't be surprised to see a lower rate for weed companies. Truth is weed companies will not have the upper hand in their negociations with resellers, offer will be significantly higher than demand, resulting in a lower sale price to resellers.
With this post, some blind people/pumpers/etc. will accuse me of trying to "scare" investors. This is not my objective. I am just trying to help investors with limited experience to conduct a proper due diligence and properly identify and assess the risks.
Full disclosure: I am long puts.