A glut of unsold pot stuck in Canadian licensed cannabis producer vaults may wind up being worthless, and could lead to industry-wide writedowns, according to analysts from BMO Capital Markets.
BMO Capital Markets cannabis analysts Tamy Chen and Peter Sklar highlighted the growing amount of “unfinished inventory” since recreational marijuana was legalized in October in a note to clients Wednesday.
As of March there were more than 150,000 kilograms of unfinished inventory – defined by regulators as cannabis that is not packaged, labelled or ready for sale – held by Canadian pot companies, according to the most recent Health Canada figures. That’s up from about 101,000 kilograms on Oct. 17, 2018, the first day of legalization.
“What remains unclear is why the planting of recently licensed grow rooms has not been meaningfully offset by the conversion of prior months’ unfinished inventory into finished products for sale to provincial distributors given the apparent supply shortage in retail channels,” the analysts wrote.
The BMO analysts said that while some producers have acknowledged that some of its unsold inventory has been earmarked to be converted into cannabis extracts – which can be used for Canada’s upcoming sale of edibles, topicals and vape products – a sizeable amount may fall short of quality requirements for recreational sales. [Read More @ BNN Bloomberg]
Your email address will not be published. Required fields are marked *
Save my name, email, and website in this browser for the next time I comment.
Notify me of follow-up comments by email.
Notify me of new posts by email.
Mayor Bill de Blasio on Tuesday blasted Gov. Andrew Cuomo’s slow rollout of the state’s new pot law. Hizzoner urged the governor to pick up the pace on completing the process of legalizing weed, telling him and state lawmakers to “wake up” and seal the deal. “The state of New York needs to get in gear here,”…
If the drug is causing gun violence, it’s because of the discrepancy between local and federal legalization laws, not weed-induced “psychosis” Gun violence is rampant in Washington, D.C. Fox News is pushing the idea that “pot usage” is to blame. The network is a little confused. D.C. Police Chief Robert Contee addressed the crime wave…
The devout libertarian known for spending a fortune on political causes is now actively funding efforts to end federal marijuana prohibition. Here’s why pro-pot advocates in both parties are high on his support. Depending on whom you ask, Charles Koch is a titan of industry, dark money political bogeyman, or the Marcus Aurelius of the…
By Michael C. Tackeff, Mallory Farrar, Justin Starling and Erica Bell Vick The U.S. Supreme Court once again refused to weigh in on the federal laws banning cannabis last month, but Justice Clarence Thomas may have opened the door for future arguments to finally make it to the high court. While skeptics are certainly justified…