Hundreds of Tons of Cannabis Are Sitting In Storage

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Germany imported 63% more medical marijuana in the first two quarters than over the same period last year. The demand for cannabis is also rising globally, according to a new infographic from Block-Builders.de Nevertheless, marijuana storerooms are full to bursting and manufacturers are even considering destroying excess supplies of cannabis. The listed growers have not been profiting from the increase in demand, but are in fact among the big losers of the crisis.

In the last six months Germany has imported 4.1 tons of cannabis, compared to 2.5 tons this time last year. In Canada, 11% more marijuana was sold in May than in the same month last year. A similar picture is also evident in the US market. According to forecasts from the “Cannabis Industry Annual Report”, sales of cannabis products in the United States are set to rise by 50% over the next 5 years.

Cannabis Manufacturers In Trouble

The boom of recent years has resulted in overproduction. In January 2019 about 118 tons of cannabis were still stored unused in Canadian warehouses, according to data from Statistics Canada. Today, at 620 tons, this figure is significantly higher. In about one and a half years the volume stored has increased by 425%.

This could in turn cost producers dearly. In order to be able to achieve sustainable prices in the medium to long term, experts believe that production must be more closely aligned with demand. As mentioned above, demand is increasing steadily, but at a much slower rate than manufacturers are processing cannabis. As the infographic shows, industry experts are even considering destroying enormous quantities of marijuana.

The black market also continues to be a problem. Nearly 62% of cannabis is still sold on the black market, according to estimates by the Canadians.

Cannabis Stocks in a Downward Spiral

A glance at the price development of various cannabis stocks gives an idea of the losses that investors have recently had to accept. Only Aphria has kept losses within reasonable limits – over the last 6 months the stock lost 3.4% of its value, compared to Dow Jones and DAX losses of 5% and 6.4% respectively. At the lower end of the scale, however, is Tilray, whose stocks have fallen by 63.1%.

All in all, marijuana stocks are currently among the victims of the crisis. While tech companies such as Facebook and Amazon are posting high price gains, the intoxication with green gold seems to have already evaporated – although this could also be an opportunity for anti-cyclical investors.

 

Continue at: https://block-builders.net/germany-imports-63-more-cannabis-yet-despite-rising-global-demand-hundreds-of-tons-of-marijuana-are-sitting-in-storage/

 

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Manostaxx
Manostaxx – Industrial Management Consulting

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