Ever since medical marijuana has been legalized in Canada as well as parts of the United States, the marijuana industry has seen incredible growth over the past year or so. Some companies have gone on to become behemoths, while others have been moved brilliantly with their rate of growth and CannTrust Holdings Inc (CTST) is one of the more progressive marijuana companies
CannTrust has managed to expand at a remarkable rate and has put together a strategy that has allowed the company to grow from a valuation of less than $2 billion to $10 billion. Such growth can only be attributed to a clear vision and expertise in managing the different aspects of the business with great efficiency.
Key Reason For Underperformance
However, it has not been a particularly smooth journey for the company over recent months. The expenses have risen significantly since CannTrust is chasing further growth capacity and the delay in getting permission for a large facility in Niagara have weighed on the company. Eventually, the company recorded a loss after having recorded profits for a number of quarters.
That being said, things are looking up now after the green light was granted for the expansion of the Niagara facility. Once the facility in Niagara is completed, CannTrust will have a facility that spans over an area of 840,000 square feet by next year. Eventually, the Niagara plant and the one at Vaughan will be able to produce 100,000 kilos of cannabis every year.
Furthermore, water and electricity are cheap at those locations, which would further bring down the costs of production. It gives CannTrust a definite competitive edge. In addition to that, the company has also decided to acquire 200 acres of land in which it will cultivate cannabis and it will add a further 100,000 to 200,000 kilos to the total production capabilities.
The extra capacity will allow the company to diversify into new products like edibles and beverages among others. According to experts, CannTrust’s production costs are lower than all other cannabis growers and that is possibly the company’s biggest strength at the moment.
Published at Fri, 07 Jun 2019 19:47:16 +0000