Article by Ken Parks, Growth Op
The North American cannabis industry has a capital crunch — and this might channel investment to low-cost growing nations like Uruguay, according to veteran pot entrepreneur Jordan Lewis.
“Everyone is waking up to the fact that it doesn’t make sense to grow cannabis in the tundra of Canada” and other places in North America, said Lewis, chief executive officer of Silverpeak Life Sciences Uruguay Inc. The South American nation, which was the world’s first country to legalize most uses of marijuana, has the potential to become a “low cost production centre,” he said.
Cannabis companies are entering a consolidation phase, a trend that will winnow the playing field as capital markets prioritize profit over breakneck expansion. Canadian producers like Aurora Cannabis Inc. and Tilray Inc. are cutting jobs to lower costs, and in the U.S. only the biggest cannabis firms have access to capital markets. Some producers are facing cash shortfalls that could put them out of business.