Excellent article by Stephen McBride in Forbes Aurora Cannabis Is Dumping Its Pot, Which May Be A Sign It’s All Over
“In just a year after Canada’s historic pot legalization, pot producers built up a massive surplus of pot. In fact, only 4% of pot produced in Canada in July has been sold!”
Some time ago I interviewed Anthony Durkacz, then Co-Chairman of FSD Pharma who said that recreational marijuana was at risk of becoming a commodity product. When I was promoting my own Marijuana book I often told interviewers that Canada would experience a shortage of pot at the beginning of legalization followed by a glut as producers came on line. McBride’s article confirms the glut.
Durkacz and the companies he is associated with, FSD Pharma (HUGE), Cannatab Therapeutics (PILL) and World Class Extractions (PUMP) recognized the problem. So each of these companies is looking at cannabis from the value-added perspective. FSD is working on serious pharmaceutical applications of cannabis derivatives, Cannatab is developing pills to deliver controlled doses and World Class has built industrial scale extraction technology to service the medicinal and edibles segments of the market.
Just “growing weed” is a low margin, highly competitive business with far too many growers and not enough customers. Adding value to cannabis and developing proprietary intellectual property around the technologies cannabis requires avoids the glut entirely.