It Could Take Years for Cannabis Stocks to Begin Producing, Say Experts

908 0

The leading cannabis stocks currently produce around one-tenth of their projected peak production

All the hype around cannabis stocks has caused a smoke screen that prevents investors from viewing the actual level of development within the industry. Experts say investors often overlook the fact that it could take years for marijuana growers begin producing at their peak capacity.

The fast pace of rising stocks can give the impression that cannabis growers are already harvesting an abundance of flowers but that is not always the case. Even Canopy Growth, one of the most touted names in the industry, is currently limited to 2.7 million square feet of approved space for cultivation – a fraction of the 5.6 million of their peak production projection.

One issue that is slowing the progress among producers in Canada is the country’s licensing process. Health Canada reports that more than 500 cultivation licenses are in the queue. Each application can take anywhere from a few months to over a year to approve.

For growers fortunate enough to receive their licenses in a timely manner, they still have to spend the time it takes to acquire sales permits – an extra requirement beyond Health Canada. As of May, sales permits in Canada were issued at an average reviewal time of 341 days.

Regulatory issues are not the only impediments to the process. Marijuana stocks will continue to produce well below the amount needed to satisfy the domestic market for the next few years, at least. A review of the top five growers in the market shows they are collectively producing 126,000 kilograms of cannabis annually, or roughly one-tenth of their collective peak production.

Social Media Auto Publish Powered By :