Limited availability of pot-infused edibles and a lack of cheaper offerings compared to the illicit market will stunt the growth of the Canadian cannabis industry, according to one analyst.
Cowen & Co. analyst Vivien Azer said in a research note to clients Monday that she has reduced her sales forecast for Canada’s cannabis industry by 32 per cent to $3.5 billion this year from a prior forecast made in November. It’s the seventh revision to Cowen’s 2020 expectations for the Canadian pot market. The firm originally forecast $7.2 billion in sales for 2020 back in January 2017.
“While industry challenges around [opening new stores] and high-quality flower supply are well understood, we now believe that the slower-than-expected rollout of Cannabis 2.0 products will also prove as a headwind to revenues,” Azer said in the report.
Azer added that excess capacity for dried flower products, a “lack of adequate” retail stores in heavily-populated areas, and disruption caused by management changes and staff reductions are also weighing on Cowen's outlook for the Canadian cannabis sector.
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