Indiva Q&A
Well, the current market cap for all Canadian LPs is somewhere north of around $30 Billion. That might look like a big number relative to the estimated size of the Canadian cannabis market (i.e. estimated at $7 to 10 Billion annually), but there is also the international market to consider, which is far larger. Obviously the valuation of companies varies dramatically across the sector, and the valuatinoas are top heavy (i.e the top 2 names are half of the total industry market cap and the top 10 would be 80% or more). So investors need to consider not just the absolute valuation, but the relative valuation as well. Finally, I would say that while the bigger market cap companies are large sprawling vertically integrated companies, we will enter a period of differentiation I think where smaller companies like INDIVA compete and win market share based on product quality and innovation. This is our strategy and ultimately we know we will be successful if consumers love the brand and products we offer. Licensing award winning products from the US is one strategy we have used to ensure we have great products on offer. Our medical-grade indoor grow is another intentional strategy top ensure quality. And innovation, through licensing, is a faster and less capital-intensive way to bring great products to consumer as well. So investors need to consider the whole picture including brand and products (i.e. not just square feet of production space) when determining the value for these companies.
What is your position on the change of direction with respect to the retail landscape in Ontario and it appears that Farm Gate sales will be permissible?
We think this is a wonderful development. Private retail, and the prospect of Farm Gate sales in Ontario ensures that we will have distribution of our products, be it through our own stores or facility or through other private stores. We have had terrific feedback on the IDNIVA brand and product line-up from companies who wish to open stores across Canada. I also think that greater access for Ontarians is a good thing; we need to be able to educate consumers about where the illegal market ends, and the legal market begins. Private store fronts will enable that education process.
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