Austrian School of Economic ThoughtCapital gains are driven primarily by assets (both long-term and current assets); therefore regardless if they are considered a value company or a growth company they have display incremental change in their top-line figures. This point makes clear that the Canadian cannabis market has reached a point of saturation and that revenues have plataued or worse declining.
Those that object that credit cycles are a misnomer because banks should always be rational when assesing the future cash flows of companies may not have factored the fact that since they are publicly traded entities they should be expected to deliver not only rising earnings (price-to-earnings), but in some cases dividends as well; hence rising top-line figures coupled with excellent margins (operating and financial leverage). They might also display naive empericisms when modelling future events using past data often neglecting the randomness of past data (the problem of induction), tail-risks (swan events), being part of extremistan environment (i.e, economics being a social science) often mistaking that we are in a mediocristan environment where the rules of randomness are known and less abstract (ludic fallacy) etc.. This causes lenders to occasionaly "blow up" as a result. I for one think that the markets are efficient BUT up to a point see past that point and its inefficient. Ludwig Wittgeinstein said it best "the limits of my language means the limits of my world" and "whereof one cannot speak; thereof one must be silent".
Conclusion: cost of capital for Canadian cannabis market is on a downtrend