RE:Future of ACB and other industry leaders. Huntington wrote: I would like to hear a counter from a basher to the following.
If we use the government of Canada’s projected sales of $5.5B for the recreational market alone, we should also note that this is the most conservative estimates of all, some independents even project as high as $22.6B; lofty and probably not realistic based on extrapolations from already legalized states, but noted none the less. I think we can all agree $5.5B CDN is a fair conservative number. With ACB being the number one producer globally with the CMED merger a conservative market share of 20%(estimated) would generate $1.1B CDN per year. Even at a share price of $15 creates a market cap of $6.8B. This all being said is not taking in to account global markets as views and laws become open to a legalized marijuana industry. Already Aurora’s has made significant progress in breaking into international medical markets.
I think it is also Important to note the possibility of spin of industry’s from what would be considered waste by products whether it is through patented technologies that aid microbs in the digestion and disposal of plant stalk, or creating ethanol fuels (adding to sugar cane and corn ethanol’s). Also the ability to create a hemp industry to include polymers, textiles and paper.
I feel that based on the above conservative numbers this is a company that can be large on free cash flow in the next 6-7 years. I believe ACB as well as the other major marijuana players listed in the Canadian exchanges have great ability to outperform every tangible sector globally. The life and longevity of the marijuana industry is comparable to alcohol and other industries that perform time and time again irregardless of economic times. The best way to describe what has happened in recent days to the marijuana sector is a gross over reaction to a minor correction.
If there is any disagreement to the above I would like to know your thoughts in a calm and respectful manner. I will give you a pass on this “Protrader” as I know your a bit caustic but oddly enough enjoy reading your posts.
Here is what I think....
The industry itself assumes that 100% of the current users will be going to the store to buy their weed, not going to happen, 2nd of all since the it’s not legal yet, there are not many producers, when it becomes legal, you will see lots of producers start ups, and since barrier at entries are almost inexistant, easy business to get in. Yes there will be oversupplies cause that will guarantee lower selling prices to the end user, black market will not be letting go a 5 billion industry without a fight. There will be consolidations, mergers, bankruptcies etc... acb most likely will become huge, look at valeant, sometimes becoming to huge too fast not a good thing, with that being said, 20 or 50$ a share Cannabis be possible, thinking it’s going to happen this year ? Most likely not, these stocks are not heavily shorted for nothing. It’s too soon, why buy acb at 8$ when you will be able to pick it up for 5$ or 6$ when the shorters start covering. JMHO :)