Marijuana Business Magazine January 2020

Marijuana Business Magazine | January 2020 20 Product inventories held by Canadian cannabis companies continue to rise faster than demand Trouble Ahead Investor Intelligence Snapshot | Canadian Inventory C annabis inventory levels are rising in Canada, and based on licensed producers’ plans to expand output, the situation could get much worse in the future. In short, supply is outpacing demand. According to Health Canada data, the increase in kilograms of total inventory of cannabis dried flower and oil (both unfinished and finished) in Canada has risen significantly and far outpaced the increase in sales during the same time period. Potentially exacerbating the rising inventory situation, planned capacity expansion by some of Canada’s largest licensed producers could increase from the current level of around 853,000 kilograms (1.88 million pounds) to 3.85 million kilograms in coming years. Dried flower rose significantly in 2019, from 143,814 kilograms in February to the latest reported level of 380,666 kilograms in September. The amount of dried flower sold in that same period rose from 6,683 kilograms to 12,922 kilograms. The ratio of total inventory to sales rose from 21.5-to-1 in February to 29.5-to-1 in September. Editor’s Note: This is the first installment of Investor Intelligence Snapshot, a new department in Marijuana Business Magazine. In each issue, this space will feature a small preview of the information available to subscribers of Investor Intelligence, the premium product for investors in the cannabis space. To subscribe to Investor Intelligence, visit mjbizdaily.com/investing. By Craig Behnke and Mike Regan February 2019 March 2019 April 2019 May 2019 June 2019 July 2019 August 2019 September 2019 Months of Sales in Inventory 21.5 22.9 24.1 27.6 31.3 29.9 30.1 29.5 Monthly Dried Flower Inventory Sales Total I.. Sales Total I.. Sales Total I.. Sales Total I.. Sales Total I.. Sales Total I.. Sales Total I.. Sales Total I.. 0K 50K 100K 150K 200K 250K 300K 350K 400K Kilograms of dried flower 143,814 6,683 174,519 7,626 214,198 8,874 262,420 9,524 312,251 9,976 349,834 11,692 389,059 12,917 380,666 12,922 Canadian Dried Flower Inventory and Sales Sales Total Inventory February 2019 March 2019 April 2019 May 2019 June 2019 July 2019 August 2019 S ptember 2019

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