ASA Gold and Precious Metals Ltd C.ASA

RE:RE:RE:Valens and Medipharm long term outlook?

[lscfa]

Interesting comment in the CC this morning. To avoid customer concentration risk Valens capped the amount it would process from any customer to 20% of capacity. So increasing capacity allows existing customers to increase contract amounts.

lscfa wrote: It yet to be proven that Valens, MediPharm or others have proprietary tech that is superior and cheaper. I think it’s virtually all the same. Large growers may end up doing extraction in-house (see Canopy link) but smaller growers will outsource the service because they can use the space that would be needed to extract for additional growing. Both Valens and MediPharm can also extract oil for themselves for resale. 

https://www.newswire.ca/news-releases/canopy-growth-announces-acquisition-of-keyleaf-life-sciences-to-support-long-term-major-scale-extraction-needs-803823439.html

KelownaClown wrote: The devil is always in the details. Supply chain economics. Can a company that does everything do all of it as well as companies that specialize in certain components, or do they choose to outsource things to companies that can do it better and cheaper? For instance, does Canopy manufacture their own grow lighting systems? No, they buy from a company that specializes in manufacturing lighting systems. The fact is that Valens has proprietary processes for extraction that no one else has, they can do it better and cheaper than their competition. Extraction isn't as easy as some people seem to think, not on a consistent, high volume, high quality basis. The growers are going to find out that growing and extracting are very, very different.

Danwesker wrote:

Hey guys this was posted on the Medipharm bullboard too but wanted to get perspective from Valens board as well. What are your thoughts on both Valens and Medipharm, long term? 

Legal forms of edible cannabis, cannabis extracts and cannabis topicals may be lawfully produced and sold as of October 17, 2019 in Canada, this will be great for extraction companies.

However, my concern is going forward in future, wouldn't large companies such as CGC and APHA have their own in house extraction facilities and how would this affect business to companies like Medipharm and Valens, would there still be a need or demand for them?

Thanks!

Dan

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