common sense will depict that the right-sizing, re-evaluating is going to continue with all marijuana stocks while they are burning through money.
In Canada, pot is going in the trash because it has gone bad. Growers overgrew and played right into the government's hands of providing cheap, competititively priced pot to compete with the black market suppliers. The solution for cheaper pot is to sell your inventory, create surpluses or give back the growing to hot third world countries. Value added distillation at the source will help to solve the storage and shipping problem. Certain specific brands will demand a premium price but "good enough" pot is just that for the common people.
To get the supply chain working efficiently is going to take big attriton and reduced supply to prevent the waste and related cost burn because your field of pot is worthless. I sense that it will also require driving out the black market to get this working properly.
Increasing the price of your skus by value adding with winning recipes for what you are offering will help to eliminate the cartels and such who probably won't compete at this level. Now that nicer options for ingestion are being provided, it is cannibalizing the smokeables, although vapes are convenient and cheap.
Canopy made a game changing move with beverage skus, that got the attention and dollars of Constellation that coughed up for almost 50% of Canopy, presumably for the beverage potential that is growing where available as it begins to enter the mainstream vices of socializing with a beverage. As marijuana beverages get a level playing field with Beverage Alcohol such that you can go to your favourite bar and enjoy a thc beverage as a healthier alternative to your usual calorie and sugar laden beer, coolers or fruited up liquor options.
The fact that all of the tropical and fruity flavoured hard liquors are arriving suggests strongly that consumers aren't rough, manly whisky drinkers anymore but would like a sweeter option. Consumers are also changing habits for healthier options and the low cal, low sugar, no hang-over cannabinoid infused is destined to be a game changer for beer and cooler formulators who are already gearing for cannibalized sales by pot and hemp drinks.
Flooding the US marketplace with Canopy branded beverages might be enough to get us to black ink and when that happens Canopy will continue to be first. They are already building the war chest for Canopy Growth USA with acquisitions and partnerships that are or are contracted to be under the Canopy when decriminalization happens at the Federal level in the US.
US MSOs are getting the lion's share of investment capital with a huge portion coming from American investors who aren't waiting for a triggering event like the Canadian LPs are.
This could take a little longer than most expected for the US law and policy makers to rewrite the laws to the will of the people, who are in favour of a legal pot and hemp business in the US.
It looks like the US is on the verge of implosion for their over-greased economy and someday soon, may recognize that the greenrush will bring tax dollars and good paying jobs.
glta and dyodd