Cannabis Cultivators Ramp Up Production to Satisfy a Growing Consumer Base

FinancialBuzz.com News Commentary

NEW YORK, Oct. 9, 2019 /PRNewswire/ -- As the popularity of cannabis products continues to grow, cultivators are tasked with the challenge of meeting consumer demands. As such, cultivators around the world are building large scale facilities in order to produce tons of cannabis per harvest. For instance, U.S. states such as Arizona, Colorado, California, and Oregon are creating greenhouses that yield upwards of 50,000 pounds of flower. Similarly, Canadian producers are building mega greenhouses in regions such as Europe and Australia, as their respective markets begin to grow. However, obtaining licensing in order to operate a grow facility is highly competitive. The Government of Canada reported that there were 179 companies that obtained licenses from Health Canada for cultivation, distribution, and production. The number of applicants also sharply rose when Canada fully legalized cannabis back in October 2018. Health Canada has been steadily approving licenses, yet, companies are still challenged with meeting a consumer base of millions. And according to Statistics Canada, by the end of the first quarter of 2019, there were reportedly 5.3 million or 18% of Canadians aged 15 years and older who smoked cannabis in the prior 3 months. Among the group, 646,000 users reported that they were trying cannabis for the first time, nearly double the estimated number of 327,000 a year beforehand. Moreover, almost half of Canadian cannabis users reported that they obtained their products from a legal source compared to just 23% back in 2018. OVerall, the staggering change highlights just how swiftly the legalization of cannabis has impacted Canada. So far, the Canadian government has limited many companies in terms of their grow house sizes and the quantity of cannabis they can produce. The strictly enforced regulations ultimately led to major shortages across Canada shortly after legalizing cannabis. Nonetheless, more and more companies are now gradually obtaining licenses and agreements in order to produce cannabis to meet the accelerating demand. According to data compiled by Ameri Research, the global legal marijuana market was valued at USD 14.3 Billion in 2016. By 2024, legal marijuana global sales are projected to reach USD 63.5 Billion while exhibiting a CAGR of 21.1% from 2017 to 2024. Pasha Brands Ltd. (OTC: CRFTF) (CSE: CRFT), Nightfood Holdings, Inc. (OTC: NGTF), Greenlane Holdings, Inc. (NASDAQ: GNLN), Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT), Aleafia Health Inc. (OTC: ALEAF) (TSX: ALEF)