The consumer demand for cannabis in Canada will finally be met, giving dispensaries a sigh of relief. But while this seems like good news, it is not without consequences. Nonetheless, Aphria Inc., which opened a new facility recently, will continue on track to run its production line at full capacity.
If Canada’s recreational cannabis producers are able to make enough legal pot to meet consumer demands, the risk of oversupply and overproduction will become a reality. The fear is not only that there will be a big stock of cannabis, but that there will be a slowdown in production for many cannabis businesses, causing inevitable layoffs.
The cost of cannabis will also decrease, which is great for consumers, but also means that the cannabis bubble might burst. Investors who were hoping to reap great rewards from the legalization of cannabis might not get the kind of profits that they were expecting to get.
Some companies are not concerned by the risk, however. Aphria’s chairman and CEO, Irwin Simon, believes that their company will be able to take advantage of the lower cost of cannabis. They plan to make use of automated production lines so that there are no people to lay off in the event of a slowdown in demand. He also believes the demand might also increase.
The company also plans on continuing to work on next-generation products, such as edibles and vapes as it grows and progresses as a company.11 days ago