Canopy Growth Corp (WEED)

[awesomesound]

Huge dose of reality for shareholders, Way to much supply and nearly no demand, Sector is destroyed in Canada, Federally legal US government industry will be no different, US right now is the wild West like BC BUD was 20 years ago before Government involvement, and fat wallet weed funds.

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!

The rest is being stored in warehouses... just like crops during the Great Depression.

For much of the past century, laws held back pot production like a dam holds back a river. But Canada threw those floodgates wide open, and the market was flooded with millions of kilos of pot.

Now there’s more pot in Canada than folks will probably ever need. And it’s only getting worse.

Pot Producers Are Painting Themselves into a Corner

Have you read the news about cannabis producers lately?

All they seem to talk about is “increasing production capacity.” Is growing more pot the answer?

Well, when there’s too much product on the market, you want to offer the best price, so buyers choose to do business with you instead of other sellers.

Pot producers are now falling over themselves to ramp up their production capacity, which would push their costs and, in turn, pot prices down.

Aurora Cannabis plans to expand its production capacity from 150,000 to 500,000 kilos per year by mid-2020. Canopy Growth is also on track to produce 500,000 kilos of pot per year.

Think about it… you could roll over 4 billion joints with the pot from these two companies alone. And many more pot producers will have the capacity to produce millions of kilos of pot in a year from now.

The thing is, the market doesn’t need millions of kilos of pot. Pot producers are already making more pot than can ever be smoked.

Investors Can’t Get Enough of Aurora Cannabis (ACB)

Aurora Cannabis is Canada’s largest cannabis producer and one of the most popular pot stocks on earth.

In fact, this stock has recently topped Apple as the favorite stock among American Millennials, according to Business Insider.

Like most pot stocks, Aurora Cannabis has taken a beating and crashed over 50% since the beginning of the year:

As I mentioned earlier, most folks think this is a good buying opportunity. I think you’d have to be nuts to touch this stock right now.

I wouldn’t be surprised if it gets cut in half again.

Aurora Cannabis Is Building “Ghost Greenhouses”

Aurora Cannabis is losing an outrageous amount of money, and the losses are growing by the day. In Q3 2019, the company lost $160 million… that’s 8X more than a year ago.

The company is investing millions into new farms and greenhouses spanning millions of square meters… most of which are simply unused.

In Q3 2019, Aurora Cannabis grew only 15,600 kilos of pot, which means it utilizes only 1/3 of its facilities. And as I mentioned before, it plans to expand 7X by 2020.

A Dirty Secret Behind “Strong Revenue”

And here’s the key…

If you look at Aurora Cannabis’s most recent financial report, you’ll see its revenue grew 52% in the last fiscal quarter, compared to the previous quarter.

That sounds good… but it’s hiding a dirty secret.

Aurora Cannabis is actually dumping part of its harvest into “wholesale,” which means it is selling it for cheap… according to a line buried deep in the company's Q4 financials.

Last fiscal quarter, the company dumped $20 million worth of pot, a 869% increase from the previous quarter. It is doing this because there’s not enough demand from consumers.

I expect this trend to grow as pot companies continue to ramp up production and flood the market with more pot.

My recommendation: Stay away from Aurora Cannabis and other big pot producers. The pot party is over. There are better and safer ways to earn profit in the stock market.

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https://www.forbes.com/sites/stephenmcbride1/2019/10/21/aurora-cannabis-is-dumping-its-pot-which-may-be-a-sign-its-all-over/?fbclid=IwAR3_FvnzPv_z55_bRJOQBxVe8M6SejBOLXjjSOt4cYVsjRRFghmxU4HkcDc#38ccfa935775