RE:RE:RE:BNN...48NORTH Touran77 wrote: quinlash wrote: If this was an issue the company would not have been able to achieve adjust EBITDA positive in the first place so simply put... you're wrong in your assumption.
To say there is an "over-supply" issue is also fundamentally in-accurate. Yes, there are articles out there that use the terminology however IMHO it is wrong to frame the supply / demand situation with Cannabis in this regard.
To have an over-supply issue the market would need to have ready and adequate access to the product. Currently there are not enough stores open in Canada’s largest province, Ontario, to supply the demand of consumers with Cannabis. More and more stores are opening in Ontario each more and more are still opening in the other provinces. Once the country has enough stores open so that everyone has easy access to legal Cannabis then we can start using the term “Over-supply” as producers run out of consumers to sell to…. That’s a hell of a long way off considering all of the possible products that use Cannabis certainly have not been rolled out.
Spectra7 wrote:
over supply of Canadian market of more than 1.2B oz. I sure hope Hexo had " right sized its requirements. If not, I think we should expect some additional writedowns on inventory. Bye bye to EBITDA positive...forget about " adjusted EBITDA. Thoughts??? S7
ok temporary oversupply :)
You have a fixation forming there bud ? *lol*. I personally do not see HEXO itself with an overly heavy amount of inventory being carried. Keep in mind they also noted that they actually ran out of trim to produce the hash. They have their old-school smokable products as well as their drinks, they noted that they are working on edbiles as well, that too will draw down on the available inventory. If HEXO has enough production in place then they likely would not consider making a bid for Zenabis, mind you, Zenabis brings to the table some pretty top-shelf products too from what I am reading online etc.
things are changing in the market (as they always do). More stores are coming online, more consumers are now considering cannabis for both rec and medical uses and more states in the US are moving to legalization.
The cannabis sector IMHO will be huge, not every company will make it big however if you bet on the right one and have the patience its a big pay off in the end or over time. My bet is HEXO will be one of the survivors and go on to bigger and greater things.
JMHO
Q