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This is the company claiming production costs under 1 cent per gram with intentions to cultivate the legendary Thai Stick over thousands of acres.
Not for flower.. but for export of THC as a global commodity.
Former Head of UN Drug Board to Lead Thai Cannabis Corporation
This is the company claiming production costs under 1 cent per gram with intentions to cultivate the legendary Thai Stick over thousands of acres. Not for flower.. but for export of THC as a global commodity
2020/02/14
https://thaicannabiscorporation.com/2020/02/14/former-head-of-un-drug-board-to-lead-thai-cannabis-corporation/
Way overvalued. Good luck to all
Understand the collapse.
Long term investors (institutional, banks) shouldn't care about how much income the company is generating but should look at intrinsically valuing the growth of its assets.
Another loan would always be made with these insane profit margins and volume demand.
Price per gram (revenue) can collapse 10 fold..
Many will have very tight profit margins.
Demand is low.
Way overvalued.
The cannabis market is no where near mature. There will be huge changes in wholesale price over the next decade.
Some states have wholesale prices near $2/g while others over $10/g.
- https://www.cannabisbenchmarks.com
Once trade opens up across North America and parts of the rest of the world we will realize when we can actually call it a mature market.
Right now, cannabis companies can produce for super cheap and sell for 25 times the cost ($5/g sale, $0.20/g cost).
There is no other industry in the world as easy to get into and as profitable as cannabis.
With such little demand relative to how much is being produced, and thousands of licensed companies, pricing will be a way to sell volumes. Huge volumes can be produced with little investment. Will see many changes over the next decade.
There are many stories.
Which one do you want to hear?
Growing cannabis is way more profitable than alchool.
Small breweries are good to clear $200,000 annual profit.
Just one acre of cannabis gown in the sun could profit $500,000 wholesale at $1/gram ($2.5M at $5/g).
Many breweries cannot afford to sell for less. Profits would decline. It's almost impossible to find a new brewery investment capable of meeting the wide profit margins and dollar volumes similar to more succesful companies in the industry.
In cannabis it's easy to find potential billion dollar companies all over the place. Its just so profitable and easy to scale (acreage).
Companies have hundreds of acres of land licensed for cultivation. Thousands more acres to come. It will still be a really profitable crop at wholesale $1/g. Just more THC to saturate the market. The sweet spot for cannabis price / cost will eventually be realized over the next decade.
The prices we see now are still that of an illegal black market product.
Breweries can have tight margins. Cannabis.. insane margins.
Costs dropping to $0.05/gram, with a $1/gram price, cannabis has insane margins.
Large volumes of cannabis (to supply a country large) can be produced with relatively small investment (infrastructure, land, etc)
Cannabis will be produced in large quantities by competitors competing with one anothers quality and margins. The price has lots of room to fall.
Why will Aurora's share price continue collapsing? As wholesale prices fall towards $1/g, with a 500,000kg/year production capacity, potential revenue collapses from $2.5B (@$5/g) to $500M (@$1/g) with slim margins.
ACB, once having a $12B market cap (now $3B) is still way overvauled in intrinsic value calculations with the price collapse factored in through time.
Its unlikely beer prices will collapse much further in the near future. The sweet spot has been found. With current production and sale costs - margins are tight and it takes huge investment to scale to the value of how much revenue a field of cannabis can generate. Cannabis has plenty of room for wholesale prices to drop and can scaled with relatively little investment.
Even if all 40M Canadians demanded an average 1g/week each (180,000kg/month or $900M/month at $5/gram)...
The 2M kilograms in annual demand could be supplied from a dozen greenhouses.
Scale it up, scale it down. Pricing collapse is inevitable. The weed is way overvauled.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=153379160
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=153371912
Increase in supply is much higher than the increase in demand. Wholesale prices and thus margins are collapsing. Canada has enough inventoried cannabis that demand could last for years with no further production. Greed is the only factor holding up these prices.. Good luck to ACB... Will not make it.
Way overvalued. Play short term. Long term will fail. Good luck to all.
Overvauled.
A deal like this would be all for publicity. Unfortunately for investors.. Coke is smarter than that.
investorshub.advfn.com/boards/read_msg.aspx?message_id=146992516
Lets scale it up.
What's the power of a 2,000g/plant yield?
Let each plant have 9m^2 (3m*3m) of grow/trim space and 134,888 plants can be grown over 300 acres (1,214,000m^2).
134,888 plants would produce 269,776kg.
If we assume a 50% crop loss, 300 acres generates $134,888,000 in revenue at a sale price of $1/g.
If each seeded plant required 10 hours of work from planting to maintenance and trimming then at an average wage of $30/hour the cultivation would cost $40,466,400.
Revenue: $134,888,000 (with 50% crop loss) - $1/g.
Cost: $40,466,400 - $0.15/g.
Margin: 85%!
Theoretically, $1/g sale price is completely realistic and still way to high.
As companies explore advanced large scale cultivation methods, production costs will continue to plummet..
Promising methods include tractors similar to combine harvesters that can sweep entire fields for the purpose of raw collection to be then mechanically processed and extracted into pure THC.
10 hours per plant can turn into minutes allowing efficient cultivation and thus a much lower wholesale price of THC.
The future will kill off 'large scale', expensive, indoor cultivation facilities projecting billions of dollars in annual revenue.
The future will be beneficial to the consumer..
Some consume up to 7g/day (2.5kg/year), at a price of $5/g - over $12,000 a year can be spent on cannabis. With a salary of $50,000 that's over 20% of income spent on cannabis. The greedy industry is taking advantage of the consumer only because wholesale prices are still that of an illegal product.
For reference, the following image has a tiny red square that is exactly 300 acres in size. At current prices, the tiny red square produces more revenue than all the other land seen combined.
There is no incompetence. This has been a scam from the beginning.. not just on the OTC side of things...
Lets scale it down.
Imagine planting a single plant.
Four months later.. Harvest 200 grams, sell for $200 (@$1/g).
What is the cost? You could say nothing.
Comparing with something like the houseplant industry.. Some of these plants are grown and nurtured for years in greenhouse like conditions until ready for sale.. for how much? sometimes $200/plant (for ones requiring extreme care and time), but often times much less. There is no doubt why major players from the houseplant industry are entering cannabis (such as Costa Farms).. faster to grow (like a weed), and way more profitable (even if the average sale price was as low as $1/g).
Cannabis firms have unsustainable business models, way tooo high overhead, way tooo much debt, and are way overvalued.
Outdoor cultivation is the future of cannabis derivative production (drinks, edibles, capsules, etc). Meanwhile, for dry herb, nothing stops the small time craft producer (low overhead, debt) from precisely growing 400 high quality cannabis plants every year ($80,000 revenue, 200g/plant @ $1/g average sale) to cover their areas premium dry herb demand.
What if outdoor plant strains were capable of generating over 2000 grams of cannabis?
Imagine planting six plants.
Four months later.. Harvest, sell for $12,000 (@$1/g).
What is the cost? The cost could still be considered nothing.
The future I see for this industry.. will take decades to develop, but if you watch carefully.. it is happening now.
US domestic supply to exceed 30,000,000kg/year through 2030 [an average 100g/year for all 300M Americans].
30,000,000kg/year is just 600 cultivators producing an average of 50,000kg/year [US already has over 15,000 licensed cannabis producers].
50,000kg/year of cannabis can be grown on as little as 100/acres.
30,000,000kg @ a price of $1/g (cost of $0.20/g) is $30B dollars in annual revenue.
To put things in perspective, in the US, corn is grown on over 90 million acres with annual revenue sitting at around $60B.
Weed: 60,000 acres for $30B.
Corn: 90,000,000 acres for $60B.
The average US farm size is over 400 acres while farmers have a median income of $70,000/year - with large scale operations (>1,500 acres) bringing in an average just under $400,000/year.
The fundamentals of economics suggests that many more will enter the cannabis supply chain (being the most lucrative industry to exist), as such pricing competition will be very high (insane margins), the price per gram for wholesale cannabis will fall under $1/g and the 100 acre cannabis farm would still produce a profit of $15,000,000 (sale price = $0.5/g, cost = $0.2/g).
***
Cannabis is way overvalued, the prices we see now are the price of an illegal product.
If US legalizes, this statement will be much more realized.
High tech, large scale grow ops will become unprofitable but long before this.. assets will be intrinsically valued to be worthless as such stock prices are 'slowly' collapsing.
If US legalized. ACB would collapse even faster.
Downwards to zero. going to be slow. The industry is way overvalued
With a funded capacity of over 500,000kg/year? What is the 'real' asset value?
500,000kg/year would generate income of $1.5B at a sale price of $5/g and a cost of $2/g.
$1.5B profit per year? What's the intrinsic value of the assets supporting this kind of cash flow?
Shouldn't be as low as $500M that's for sure.. (assets could be purchased and the investment would triple in one years time)
Unless.. there is a problem.
The collapse of wholesale prices.
Will continue much further - so we observe the collapse of an industry.
These assets will be 'worthless'.
The assets here are worth billions.
What would it take for them to be worth nothing?
High class facilities will become unprofitable with high costs of production as whole sale prices continuously collapse.
Making much of these assets.. worthless.
A model to be adopted around the world:
Push for farmers to grow cannabis
https://www.bangkokpost.com/thailand/general/1805164/push-for-farmers-to-grow-cannabis
Public Health Minister Anutin Charnvirakul has proposed individual farmers be allowed to grow cannabis plants under a joint scheme with the state.
Mr Anutin, who is also deputy prime minister, said he has signed a draft regulation which will be examined by the Council of State and then submitted to the cabinet for consideration.
The proposed regulation seeks to allow individual farmers to gain permission to grow cannabis plants for medical purposes but the farming will have to be a joint scheme with an authorised state agency, he said yesterday. Permission to grow cannabis will be reviewed by the Food and Drug Administration.
According to Mr Anutin, it is a revision of the original draft which allows growing of cannabis plants in the form of a community enterprise only.
"When it takes effect, those who want to grow cannabis can register as farmers and work with a state hospital in growing the plant," he said.
He said the the Bhumjaithai Party's campaign policy to allow people to grow cannabis plants at home has yet to be examined by the House of Representatives. He said the party is seeking amendments to the Narcotics Act to allow each household to grow a maximum of six cannabis plants.
Going to zero
Market cap almost $3B.. Way overvalued. Good luck
You can only blame the company so much.
The industry fooled company executives just as much as investors.
Executives have sincere belief in inevitably massive and fast growth - Just like investors.
But reality continues.
Way overvalued stock, Way overvalued industry.. from a way overvalued product.
Simple as that.
Way overvalued. Good luck all
Terry buying shares is a blow to the lawsuit. When the company goes under he can continue saying how much he believed in the future of the company, industry, now with proof.
Going to zero? Shorts will wait
The Thai Government has confirmed that households will legally be able to grow up to six plants.
Thailand will soon allow its citizens to legally cultivate up to six cannabis plants in their homes, which can then be sold to the government to be processed into medicinal marijuana.
The Thai Governments Minister for Health, told voters that each mature cannabis plant sold to the government could net $2,225.
This means Thai citizens can supplement their income by as much as $13,350/year while the countries average income is just $8,200/year.
70M added to the OS. Lots of shares, high share price, a grim future with decreasing margins year over year. It had to be done!
Way overvalued. Suppose to be something special here.. kind of is.. not for long.
Overvalued. $0 next 5 years.
Next stop $1 (market cap ~$1B) much more realistic valuation - still overvalued.
Will do! Thanks!
Exactly
I think so
If they came out public...
Agree.
~30% Canadian consumers still purchase from the black market. While the total supply of existing black market product could be projected between 1,000,000kg to 5,000,000kg. Black market product will be around for years to come. Soon.. for the consumer, it wont even be worth it to purchase from the black market.
Based on Stats Canada cannabis retail sales and supply and demand numbers from the Governments Cannabis Tracking System.. The market is oversupplied by nearly $3B.
August Sales
12,917kg @ $6.00/g - $77,502,000
11,705L @ $4.25/ml - $49,879,000
$127,381,000
Total Inventory
389,059kg @ $6.00/g - $2,334,354,000
155,128L @ $4.25/ml - $659,294,000
$2,993,648,000
www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=2010000801&pickMembers%5b0%5d=2.30&pickMembers%5b1%5d=3.1
www.canada.ca/en/health-canada/services/drugs-medication/cannabis/licensed-producers/market-data/supply-demand.html
If all cannabis supply lines were instantly cut.. with an average monthly dried herb demand of 15,000kg, inventories would deplete for over 26 months until empty.
Meaning... in two years from now, you could consume cannabis that was cultivated and inventoried today.
Inventories will increase at higher rates.
Over 6 million cannabis plants in Canada are seeded and growing - equating to additional increases totalling at least another 300,000kg over the next 6 months.
The number of LPs is constantly increasing. The total active cultivation area (390 acres as of June 2019) will increase 10 fold.
Margins are still insanely high.
Wholesale prices will inevitably drop.
Companies will collapse.
Retail sales are increasing big time. This all looks good... Until you take the most recent sales for the month of august ($127,381,000) and divide that by an average price of $5 a gram... you realize that this demand could have been grown on just 25 acres of land. The price per gram is collapsing. Way overvalued.