Who will win in a over supplied market?Market will be saturated long before these guys get their large expansions built. When that happens only the low cost producers will prevail. Competition and over supply will bring prices down. Think of dope at $4.50/gram. These guys haven't announced what their cost of production will be in the new facilities but I doubt it will be significantly lower. Going by the current $1.80 cost, $1 for governments taxes and then dispensaries take a piece or distribution/packaging expenses. Your left with $1.50gram? Then 40% is tax and you get $1. Still have to pay the CEO and his teams salaries, overhead etc.
This was a great stock when it was cheap but I happily exited with over a double at $1.10 many months ago. Missed the big run but rolled the money into THCX while it was cheaper so meh. They have cheap power and low property taxes and more bringing their currently in production cost down to $0.89/gram. With scale of their bigger expansions this is expected to decrease further. They also have many medical patients, medical marijuana will be void of the $1 tax. So in a saturated market medical marijuana may go for $4. Minus $0.89, distribution and dispensary leaves $2.50, minus tax $1.70, pay the CEOs etc $1.50 actual profit.
The low cost producers will be the ones that grow long term. Thcx will also complete their big expansion to 107,000kg in December 2018 and realize the higher prices off the gate.. While many others (hvt) won't have large volumes of product till everyone else does too.