one example of the significant potential of the US market for Kontrol over time.
Why does the cannabis industry represent a new target market for Kontrol?
According to ArcView Market Research, over the next 10 years spending on legal cannabis worldwide is expected to hit $57 billion by 2027. The adult-use (recreational) market will cover 67% of the spending; medical marijuana will take up the remaining 33%. The largest group of cannabis buyers will be in North America, going from $9.2 billion in 2017 to $47.3 billion within a decade.
Based on industry estimates it takes approximately 2,000 kilowatt hours to produce a pound of cannabis product using traditional growing methods. That's similar to how much electricity is used by an average household over a period of 6 months. Using Ontario as an example, given the number of licensed cannabis growers in Ontario, up to one percent of Ontario's electricity grid may be required to fuel the Ontario market and this may account for up to 300 megawatts of power.
Further for competitive reasons Growers must reduce their overall costs to manufacture each pound of pot produce. In a global industry with pricing competition managing input costs is essential. The cost of energy is a substantial input cost that needs to be reduced in order to be both cost competitive and add to the bottom line.
The cannabis industry is a new industry, with no comps, historical trends and many pitfalls. What experience does your management team have in the cannabis industry that would help investors sleep at night?
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