DSEEGS wrote: BiEric wrote: schocor wrote: I have take issue MOSTLY with the production costs of $1/g. I believe that the best in the industry right now (canopy) is $3.63 - maybe that can be improved upon but it will not get to $1. Right now they can sell fro $7 - again due to the exces capacity that the industry is building I anticipate this will also go lower - maybe $4-6 makes more sense based on the Oregon/Colorado experience. I doubt they will be able to sell 240K KG. I also doubt they will be able to grow this in the first few years - like an oil well I anticipate initial technical challenges that can be overcome with time and experience producing at scale. Liquor stores - had cash rich Aurora not bought out this troubles Alberta retail brand they would be backup right now. I am not sure this is a great acquisition - but they may be able to do something with the store fronts; still not sure how economic the retail portion of this sector will be; I expect most will be mail delivered - and I still expect most of the mail delivered over the next 2 years to be technically illegal because it is cheaper. On a net income basis; I don't see Aurora making money for a few years. Aurora is an unproven company, with an unproven board of directors, rich with cash, buying everything in site hoping something sticks. When people ask "HOW CAN IT NOT MAKE $1B a year" I recognize a valuation bubble. You guys have bid up this stock so that is priced to perfection; literally everything (growing, financing, retail, international expansion, legal framework, price inelasticity) have to go right for this company to be valued at where it trades today from a discounted cash flow perspective. When you see this you short; there might be a better stock to short (ronos or something like that is looking good as well) - but Aurora is certainly shortable and will be lower in price 6 months from now in my opinion - which is only based on numbers and assumptions.
lobe these informative posts, but pumpers will call you a basher/shorter cause they can’t handle the truth.
Lowest cost:
mari supposedly will be able to produce for .60 cents a gram.in future due to natural gas at facility .
currently APH has always been tops at just under a buck. Acb now with sky will be just under abuck as well.
Colorado is bad example as there is much more saturated market with more weed shops than 7/11 s which drive costs per gram down...and their companies dont EXPORT..can even cross state lines (and its a billion dollar biz annually) ...on the other hand canadian LPs will be exporting majority of product overseas to higher margin markets germany italy etc etc..abroad average cost is well above what domestic cost pergram will be..,thats where you fail to incorporate growth in regards to share value .also the cbd is a billion dollar industry as well and most weed co are enterring that space ...
To your point of mail order that might be the case in rural areas but major cities people will just pop in to one of the many stores just like they do with the beer store ...friday nights hit liquor store/beer store/weed store...no different..now in person you can smell the product ,see the product and have it in hand immediately . The only way i will order is if a BC company product like doja/hiku is not offered in my province..
Furthermore dont forget about oils and edible revenues...oil is projected to be large part of revenue...oil means higher profit margin per gram ........and you know what you need to make oil is dry flower...so 240k kg will be gone in no time with domestic and overseas markets..medical and rec...oil sales, flower sales .cbd pills ,drinks patches and tinctures....
in regards to acb unproven? The whole sector is basically unproven..this is unchartered waters and has the eyes of the world on these companies...
Finally, the worldwide market is huge medical and rec. Most countries will IMPORT to meet their demand as it is nearly impossible to get laws passed that canada has passed for these LPs.
With first to market and confidence in delivering these canadian LPs have the ability to squash competitors in the future.