The elephant in the room.....https://ca.finance.yahoo.com/news/time-cannabis-investors-face-elephant-143039235.html The elephant in the room Canadian Business recently did a good job explaining the forensic accounting mess that is the cannabis industry. Canadian reporting of marijuana growers sets a new low for integrity, stated forensic accountant Al Rosen in the January 24 article in Canadian Business. Its a bloody mess. Ive stated on several occasions that the cannabis industry would someday face the music because the lack of transparency in its financial statements combined with a growing supply of product would leave many companies struggling to keep investors happy. If and when a legal, recreational market opens up, that could change. But for now, if you do the math and not enough investors do the math we could see a huge drop in prices, stated Chris Damas, author of the BCMI Cannabis Report in February 2017. That alone could wipe out a good chunk of the companies out there. Aphria CEO Vic Neufelds approach always impressed me because I got the distinct impression early on that he understood that prices were going to fall, perhaps dramatically, as supplies increased; therefore, Aphria focused on being one of the lowest-cost producers of medical marijuana in the country. Yes, I liked the fact Aphria was solidly in the black, but it was this foresight about marijuana prices that attracted me to the company. Lets face it; marijuana prices are the elephant in the room for both growers and investors. No one wants to talk about it. Bloomberg discussed the issue at the end of January, making some interesting observations. Falling marijuana prices will indeed pose a challenge to producers, said Bloomberg Intelligence analyst Kenneth Shea. In Colorado they have learned to diversify and add more value to the equation. Companies like Canopy are doing this, but in the end, unless Canadian producers can figure out how to export enough product to keep the domestic supply in balance with demand, prices will continue to drop, cutting into already razor-thin margins.