Who Will Be Prepared for a Cannabis Oversupply?

Only two months into its recreational cannabis market, Canada is experiencing growing pains as there is limited supply to meet significant consumer demand. According to numerous market analysts, however, this is more than likely to change as the industry matures. With demand projections ranging between 600,000 to 900,000 kilograms per year, and a potential supply capacity of up to 3 million kilograms, Canada is facing what could be a significant oversupply problem (and a resulting drop in prices) in its nascent market.

In a recent article, The Motley Fool’s Keith Speights addressed this subject and discussed the tactics that some companies are implementing to meet this concern head on. In particular, he spotlighted The Flowr Corporation (TSXV:FLWR), a cannabis cultivator currently building its 85,000 square foot flagship facility in Kelowna, British Columbia. In order to effectively operate under potentially lower cannabis prices in the future, the company has designed a business model based upon low operating costs and high crop yield. The company uses a “flood-and-drain” system and is working on developing other innovations through its research partnership with a The Scotts Miracle-Gro Company (NYSE:SMG) subsidiary, Hawthorne Gardening Division.

Flowr has also developed a cultivation method that does not require irradiation. This helps enhance the quality of their product, enhancing both taste and smell.

To read the full article, click here.

Click here to connect with The Flowr Corporation (TSXV:FLWR) for an Investor Presentation.

Source: www.fool.com