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Retail Investor's Perspective
been commoditized. Another origin story is we are heading for record over-supply. Some who counter this hypothesis state there are too many different uses and submarkets for the product to be commoditized and many of these require high grade source material. Without doubt that is a contributing real factor. But if it were solely true, jurisdictions such as Oregon and Washington would not have witnessed dramatic price drops.
Supply Management is the key and Health Canada licenses are tied to a property and a facility and therefore acts somewhat as a supply management tool. These licenses cannot be bought and sold and are not readily transportable or transferable. But as with any industry, over time the price falls and as price falls demand must necessary increase especially when compared to substitutes and particularly as public education/acceptance grows – you know from past articles that alcohol sales fell substantially where cannabis has been legalized.