Strong cash positions and the ability to negotiate with suppliers will be key for cannabis companies looking to withstand any operational disruption caused by COVID-19, according to one leading cannabis analyst.
Eight Capital’s Graeme Kreindler wrote in a report Monday that the rise of coronavirus cases globally is likely to see the cannabis sector in North America face the supply chain pressures that other industries are already facing – mainly sourcing items from China and finding protective gear.
Fears of the virus’s economic toll could be the latest blow to the cannabis sector which has already had to deal with facility shutdowns, layoffs and weaker-than-expected financial results this year from several major companies hard hit from an oversupplied market and a dearth of available legal pot stores.
However, Kreindler points out that Canopy Growth Corp., Cronos Group Inc. and Aphria Inc. have among the highest net cash positions in the industry, and would be better equipped than their peers to carry increased levels of inventory and absorb rising component costs.
Read more at bnnbloomberg.ca
