Extractors don’t have anything proprietary other than their processes which matters less when they are producing what is essentially a commodity. Because of that, there is always a threat that the big guys take extraction in house (as some have done already, namely CGC). So in the long-term horizon that is the number one threat imo.
In the next few years, however, there is an abundance of opportunity. There are so many players in the space right now from a retail perspective and not nearly as many on the extraction side. And the small to mid sized companies may not have the capital or capacity to go into extracting. It’ll be interesting to see how those small to mid size retailers fare in the long term; some may not survive ultimately in this still developing market.
But back to the extraction side. As you said, the firm commitments and contracts spanning multiple years help provide steady cash flows and return. I also get the sense that the demand in this niche of the cannabis market greatly outpaces the supply. So that is why I’m very excited by Neptune. They clearly have a long term vision, which I love. They are rapidly expanding to what will essentially be a market leading extraction capacity, and this is before they’ve even really begun to start realizing revenues. They are preparing this company to be able to ramp up very rapidly which is exciting for a shareholder. Those who aren’t in the know will look at current performance (or lack there of) and miss the fact that this company is poised for explosive growth.
News 
Market Data 
Discover 
