As of March, Health Canada reports LPs have 150,000 kgs of “unfinished inventory.” After months of uncertainty about what this might refer to, BMO Capital Markets warned some portion of this stock might actually be worthless—too poor quality even for extraction biomass. As a result, there may be industry-wide write-downs.
Bloomberg
- Some producers have stressed their unsold inventories consist of product stockpiled for extraction.
- For some time, insiders have warned “unfinished dried cannabis” inventory may refer to a variety of substances. It may be dried cannabis buds not yet processed or packaged, but it may also mean trim (fan- and sugar-leaves) or cannabis biomass.
- “Unfinished inventory,” may still also refer to cannabis that has been damaged or is otherwise unusable for even extraction purposes.
High Street CEO Adrian Robinson told me, “A lot of companies have been saving their trim, their fan leaves or their sugar leaves, and people are building out these hundreds of thousands of square feet of greenhouse. You’re not able to prune those plants like you are in a smaller thousand or two thousand square foot room—you end up with so much more biomass you harvest. So I think you’ll continue to see the biomass increase although there isn’t a differentiation between biomass and bud on the balance sheet.”
Quick Hits
- BDS Analytics estimated the global market for legal cannabis will exceed $40B within the next five years, largely driven by North America.
Globe and Mail—Paywall - As Canada becomes accustomed to legalization, BDS Analytics predicted, spending on MED will decline from $607M to $506M—unless there’s a tax incentive to remaining a MED patient.
The Leaf - The deputy director of China’s National Narcotics Control Commission said the number of Chinese cannabis users increased by 25% in 2018, and blamed Canada and US states for legalizing.
CNN
