RE:RE:RE:RE:And still a $150-$180 mm NET annual forecast?Your argument is rendered moot. The only black market selling I know that has the smelling, looking and touching is the guys that come right to your door with a bunch of samples and a trunk full of bags. The websites do really well, not because of the price but because quality in the black market is better right now then what the LP's are peddling, outside of 7Acres and Broken Coast. Everyone and their grandmother are now used to buying anything online just by reading reviews from people, and those reviews are all over the place on every strain I've ever wanted to buy. those BM sites will be easy as torrent sites to shut down, the average person doesn't want some federal warning to pop up on their screen saying their IP address has been entered into a database lol. As for the brick and mortar dispensaries, well they've been shut down in the past by the dozens and they will continue to get shut down in the future until the only stores available for people to go to are government licensed brick and mortar stores or online sites.
Don't think for one second the government cartel isn't a force to be reckoned with, this is HUGE money and even bigger tax collection plate in the eyes of the elected officials. We went through it with the alcohol prohibition and its no different this time.
I will agree with you on one point though. Most of the companies out there don't have the time on hand to wait for all this to transpire, but you're on the wrong board, not only does Supreme have enough money to last through to the end of this, it's also going to be profitable in the very near future because of the quality in products, and their due diligence with borowed funds...
watchmeplz wrote: People do care about quality on the black market for sure. You can touch, taste, feel the black-market product. The legal market is completely different, the retail customer can't distinguish the quality difference because of the opaque packaging leaving a user to choose by price only or by liking the tiny little logo on the package. When the LP's only customer before retail is the provincial government then LP's have no choice in determining price and margins, its how low the other guy(another LP) claiming he has the best quality will go and if you want to match or beat that price.
And yes your correct, all the unwanted lower trim will filter its way to extracts and then to edibles, but not only is that oversupplying your concentrates, have you ever seen cannabis that is old and has been turned into extracts? It turns black from oxidization and nobody wants dark extracts regardless of the quality you put in, so supreme will be on a timeline with there trim and when there’s a oversupply issue, LP's will be using their bud to extract and not trim so Supremes quality trim will become irrelevant and the lowest price again will take control.
Canada can try as hard as they want to stop black market but as we all have seen from revenues that’s not going to stop until the prices can be beat and maintain prices below black market which is impossible due to a minimum 3 levels of taxation. John Conroy is going to bat for illegal brick and mortar dispensaries so no prosecutor is going to waste court time tieing the courts up arresting dispensaries until that case is finished and others are, years and years from now.
Online black market, exists in massive quantities, think about the amount of man hours it would take just to shut down 1? There’s thousands. I believe one, budmail which is a black market online, has been operating for 10+ years right through harper government. There’s a reason they aren't being stopped and its not because of lack of supply people were previously quoting for transitioning to the new legal system, its because of law and holes in it that cant be closed, just like acmpr's exisitng in there current form, litigation, law of precedence and how the country was originally set up, allows them to exist and you would most likely have to rewrite history in order to change this. This is a years and years to come project something which LP's don't have as the burn rate is absolutely crazy and you can only roll back so much before people start calling you a joker.
Even in your mjbiz article:
"The council also requested a meeting early in the new year among cannabis CEOs and senior Trudeau officials"
Meeting in the new year? lol, all the LP's will be broke before they even have a discussion about it, let alone action. Haha, good luck everyone..
Go0B3r wrote: Man the twatwaffles on the fire boards is about the only thing lacking quality and very much in oversupply... SHM
This is from the article you just posted.
"Health Canada defines unfinished inventory as the amount of cannabis held in stock by a “cultivator or processor that is not packaged, labelled and ready for sale.” It defines finished inventory, a figure pegged at 60,872 kilograms at the end of August, as product ready for sale that is held in the warehouses of provincial wholesalers and licensed producers." The writer btw doesn't look like she either consumes or knows a lick about cannabis outside her day job to post her article. Here's the part she skims over.
"While it is unclear what percentage of the unfinished inventory consists of dried bud versus cannabis trim (leaves from the plant that can be used for extract products) or even potentially other plant waste, the rapid growth in the metric has some analysts concerned." I'm willing to place a few bets on the point she's making. 1) analyst are concerned by default of any industry they don't understand 2) they don't understand what they've never really been a part of, which in this case is the cannabis culture.
Here's a fun fact for you, the percentage of yield from flower to extracts is about 20%(at most). So for every 100kg of flower they only get about 20kg of extracts. If the flower you begin with isn't adequate for smoking(which very little of what I've smoked from other LP's is) then it wont be very good in extract form for smoking either. this means that the majority of this stuff will end up in perishables(edibles).
So no, you're wrong about the quality aspect of the flower(the beginning of the production into other markets) that no one cares of gives a cr@p. My biggest concern is seeing so many people in the investment communityare investing in an industry they have absolutely no clue about lol...
When Trudeau puts out harsher laws against the BM outlets that still have a hold on the consumers that should be buying legallly, guess what kind of flower they will want and who they'll buy it from...
https://mjbizdaily.com/canadian-cannabis-group-appeals-to-trudeau-to-help-fix-industry-challenges/ watchmeplz wrote: Guys, no one except this board knows about supremes 'HIGH QUALITY' because its all labelled in packaging no one can see whats inside anyways! Who cares about "high end" when you can't smell it, cant see it. Everyone claims there stuff is the best, who cares you pumpers think this is the best, no one is listening!
By the way, neither does the government, your single outlet to sell the product recreationally, all they see is 200 LP's claiming they have high end and each one trying to undercut the other to make the sale and hoping the province will pick them up and retail them.
You might sell a little product with 'high end' but really what hexo did with low end is the right move, get to your bottom dollar and make sure no one can catch you as the race to the bottom begins with all this over supply.
https://business.financialpost.com/cannabis/too-much-weed-canadian-cannabis-producers-are-sitting-on-a-mountain-of-inventory-and-its-making-some-industry-watchers-nervous I use the 'right move' conditionally for now as hexo is in a world of pain too.
AccountabilityM wrote: Last quarter there was a revenue of $10.9 MM and a net loss of $18+ MM.
With 9 months to go, and despite a top tier product, it is going to be hard to generate that $150-$180 net income (especially in a race to the bottom pricing scheme). That, and we have the vaping stigma.
This would have been the time to correct that forecast, but, management must have some stellar contracts in place. There's no question on if they have a premium product.
Finger crossed and good luck to all.