- Shift happening from Canadian to US-based cannabis operations.
- US companies delivering results and servicing a much larger market than Canada.
- Flower One (CSE: FONE, OCTQX: FLOOF) great example of US-based operation delivering on expectations.
Highlights from Financial Post's interview with Purpose Investments Greg Taylor (link below). We are starting to see a shift from Canada to the US:
- Most Canadian cannabis stocks have been bought on hype, and have not been able to deliver on results and financials. The US is actually starting to deliver on some of the expectations.
- Too many licenses were granted in Canada for the size of the market, needs to be narrowed down to 20-30.
- As a result, Canadian companies will begin to fade away. Consolidation will take place as business models fail. Some strong Canadian companies will emerge and last, but the bigger opportunities are in the US.
My US-based cannabis stock pick: Flower One (CSE: FONE, OTCQX: FLOOF) is a great example of a US-based operation delivering on expectations:
- They are the largest Nevada-based operation with an up-and-running 400,000 sq ft greenhouse and 55,000 sq ft post-production facility.
- They have delivered on cultivation, proving they can cultivate large-scale at low cost.
- Flower One will be servicing one of the largest markets in the US. For example, over 42 million people visit Las Vegas annually, and while all may not spend on cannabis, that is still a number larger than the entire population of Canada! See more Nevada cannabis sales and tax revenues here.
- Flower One will be releasing sales numbers in the coming months - a stock to closely watch.
Analyst's Disclosure: I am/we are long FLOOF.
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