S&P/TSX Venture Composite index (INDEXTSI:JX) up modestly on Cannabis
The S&P/TSX Venture Composite index (INDEXTSI:JX) was up modestly at midday, showing a .3% increase on moderate volumes to 797.95. cannabis affect their constituents Aurora Cannabis Inc. (CVE:ACB), Aphria Inc (CVE:APH), Mettrum Health (CVE:MT), and Emblem Corp (CVE:EMC), as well as Organigram Holdings Inc. (CVE:OGI) were all major traders by dollar value on Canada’s Junior Exchange.
Aurora cannabis was off by $0.01 at $2.63 on volume of 1.8 million shares traded. the company announced on Monday it had surpassed 12,000 registered patients in its first 12 months of product sales since January 2016. The company also updated investors on its expansion activities add its new Aurora Sky production facility at Edmonton International Airport which is expected to be completed in the second half of 2017.
Canopy growth Corp announced that it was tripling production through the acquisition of a property that currently houses its headquarters as well as the Tweed Inc production facilities. Bruce Linton chairman and CEO said increase in the scale of our cannabis production capacity is vitally important to our operations. Even as a diversified producer using Greenhouse growing an indoor growing facilities you know there will be a need for a commercial processing space that can be used to convert cannabis and cannabinoids into higher-margin products.
This trend among cannabis Growers in Canada stands in stark contrast to the prospects for growers in the United States where Bloomberg today reported that cannabis prices were Fallen dramatically, threatening some newer and smaller companies with bankruptcy.
According to the Bloomberg article anybody that is investing in the sector or starting a business in the marijuana sector needs to be doing so with the understanding that the price of cannabis is going to drop precipitously said Troy Dayton Chief Executive Officer of Oakland California paste arcview group.
Canadian Growers have always operated under the expectation of fierce price competition, especially after the other decision in the Supreme Court of Canada preserve the right of certain ACM PR patience to continue to grow their own end or appoint someone to do so for them.
Bloomberg says the wholesale price for marijuana in Colorado fell to $1,300 a pound comma or $2.86 per gram. Canadian Growers are seeking to mitigate price concerns through scaling-up growing operations and automating processes well capitalizing on economic benefits realized from hybrid Greenhouse operations.
Aphria yesterday announced that it was launching phase 4 of its expansion that would see its total operation expand to over 1 million square feet.
With the weaker Canadian dollar, Canada may be in a position to export marijuana to the United States if Federal lawmakers can find a way to modify International laws to permit that.
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