RE:production cost of the average pound of weed.Using your high end cost number of $600 per pound that equals $1.32 per gram. That means they will make about $1 per gram profit on what is sold to XLY. That is not a bad margin and is very good that they got cash up front and still get to sell at a profit on top of that.
This is a small company compared to others out there. We are barely hanging on to a $10million market cap, It only take profits of $1million per year to support the value we are sitting at long term at a 10x P/E ratio.
This company is never going to compete with the major players, but small craft type growers will have their place in the market and I think Lotus could bring in $5-10million per year in profits in the next couple years which would support a much higher market cap then we have now.