RE:Oversupply or ShortageHomorider2 wrote: Some are saying oversupply is comming down the pipes. I just read an article that stated the expected annual market will be 1 Billion Grams a year. It also stated the top 15 Producers are planning expansions tht will produce 1.8 Billion.
So how much grow space is required to grow 1 Billion Grams. If producers can get 200 grams of product annually per square foot, then we would need an industry total of 50,000,000 square feet. Has anyone added up the total licensed space to this point and also the total licensed planned space?
I really think we should be good. If Canopy plans to have 5,000,000 square feet and can profit only $2 per gram times 200 grams per square foot then by my napkin math they should be able to earn profits of $2 Billion Annually, not bad for a $7 Billion Market Cap company.
So as some have suggested $100 shares certianly not out of the question. That would be roughly an $18 Billion Market Cap and 9/1 P/E Ratio.
Any thoughts guys?
First of all, Canopy plans to have 5,6m sq feet and yield per sq feet is between 80-120g for LPs with some exceptions so we can take an approximate of 100g/sq foot yield annually. When fully operational, we will be able to produce 560 tonnes and a $2 profit would imply in a profit of $1.12b. A price of 100$ and let's say we'll be seeing a lot of dilution and will have 300m shares outstanding until the end of 2019, would mean a 30b market cap and a forward PE ratio of 26,8, which is not bad imo for the first year of rec for this booming industry.
Bibi