Article by Geoff Zochodne, Financial Post
The head of leading Canadian pot producer Canopy Growth Corp. sees the cannabis industry as ripe for “disintegration,” rather than just consolidation.
Bruce Linton, chairman and co-chief executive of Canopy, outlined the somewhat apocalyptic-sounding vision for the future of the business Thursday morning, a day after his company announced they were part of the biggest deal yet in the marijuana industry.
“I get asked all the time, ‘Is there going to be consolidation?’ I think there’s going to be disintegration,” Linton said during a fireside chat at a cannabis conference in Toronto.
“Disintegration happens when people make promises at valuations that can’t possibly be fulfilled, because they have no off-take agreements, they have no chance of doing anything potentially other than building inventory, and probably a third of the money that’s being doled out isn’t actually ever going to turn into any inventory. And the reason is, like, it doesn’t always work.”
The comments come as cannabis producers are ramping up their operations ahead of Canada’s planned legalization of the drug on Oct. 17.