The marijuana industry is transforming before our eyes and quickly maturing into a high-dollar industry, generating close to $11 billion in licensed-store sales in 2018. The duo of Arcview Market Research and BDS Analytics foresee more than $40 billion in worldwide legal pot revenue by 2024. Furthermore, by the time 2030 rolls around, the legal cannabis industry could be generating a whopping $75 billion in annual sales, according to Wall Street investment firm Cowen Group.
There appear to be numerous ways for pot companies to make money, albeit most of the focus has been on North America and, in general, producing as much marijuana or cannabidiol (CBD) derivatives as possible. This is why top-tier producers like Canopy Growth and Aurora Cannabis have been awarded the largest and second-largest market caps in the cannabis industry, respectively.
But there are other intriguing ways for marijuana stocks to capitalize on this growth, and niche small-cap company…
Flowr Corp. (NASDAQOTH:FLWPF) plans to show investors how.
Flowr chooses quality over quantity to separate itself in an increasingly crowded field
Flowr isn’t your typical Canadian grower. Rather than focusing on quantity, like many of its peers, the company’s Kelowna campus in British Columbia has been entirely focused on quality. When the build-out of Kelowna is complete and fully planted, Flowr will likely be generating 50,000 kilograms a year. That’s not a lot of cannabis, relative to the more than one dozen individual, joint venture, and royalty players capable of more than 100,000 kilos of annual output at peak production.
But there’s a big difference between what Flowr is growing and what the company’s peers are able to deliver.
Flowr’s use of genetics, and its partnership with Scotts Miracle-Gro subsidiary Hawthorne Gardening that has the duo testing lighting, soil, nutrient, and hydroponic solutions designed to improve yield and efficiency, put this company in a class of its own. Flowr is already expected to yield 300 grams per square foot at Kelowna, which is about three times higher than the expected industry average yield, and has plans to work toward boosting this efficiency to as high as 450 grams per square foot. At 231 grams per square foot, OrganiGram Holdings is the only major grower even within a stone’s throw of Flowr’s production efficiency at Kelowna.
Perhaps even more important is the fact that Flowr is focused on producing ultra-premium and premium-quality cannabis. The market will soon be overwhelmed with discount and average-quality cannabis, but competition among ultra-premium developers is minimal. That means strong pricing power, as evidenced by the company’s rising per-gram price for dried cannabis in its most recent quarterly report.
Although Flowr does have planned outdoor grow sites at Kelowna, most of which will be used for extraction purposes (e.g., oils, edibles, vapes, concentrates, tinctures, and so on), it’s this focus on premium-quality cannabis that separates it from the pack…
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