Despite the devastation to the pot market and the reported losses for Canadian LPs, Tilray and Canopy are actively picking up like minded companies!
So what do they know? They know that the whole market is beaten down badly because government is screwing things up like only governments can!
They have also sorted out what sells and what doesn't as well as what is profitable and what is not.
In Canada they have figured out that with the current competition and the marginal price of their skus that there is a market there but no profit to be made because of supply and demand and some very nasty decisions legislated by anti-drug people to curtail sales or leave a way out for bad decisions by those charged with writing the rulebook.
I believe that Tilray and Canopy know that it is all or nothing and it looks like they are choosing all over nothing and still moving towards it by picking up interesting companies with brands that show promise and doing it at firesale prices after some crazy sharepricing that has defied commonsense which has triggered cause and effect.
Too many players and too much supply is a self rectifying situation that is going to result in a huge amount of failures because of lack of funding to stay in the game.
I believe that the well backed financial capability to survive the attrition is going to be key to survival. The LPs built tail to snout marijuana and hemp companies and just need to survive the storm until it passes.
There is going to be a ton of bad news but well prepared, capable with the ability to raise operating capital is key and the law of supply and demand needs rightsizing for the winners to be successful.
These two companies that I have mentioned don't act like they aren't in for the longhaul. Instead they continue to pick up shares and control of complementary businesses while the prices are beaten down.
Canopy just did a deal to secure Wana brands and TER just got a listing on the TSE while Tilray seems to be going to school on STZ by picking up beer and distillery companies, I believe with the intention of moving hard in the beverage market with the new exciting vice of cannabis infused cocktails and seltzers that show promise to cannibalize beer sales when the lobbyists get through to the law and policy makers for a level playing field for potpreneur beverage skus with big alcohol.
These LPs are either perpetuating the biggest scam the market is going to see in the pot biz or they have a big picture story they are trying to deliver on. Keep your eye on who is spending and building because it means they have a plan that is bigger than what the small players can see.\
glta and dyodd