The European cannabis market is the new frontier and companies like World High Life PLC (NEX: LIFE) help investors find success in this highly competitive sector
The bad news for Canadian cannabis stocks’ fans just keep coming. There is apparently a massive oversupply on the legal Canadian cannabis market and analysts are already warning of a fall in prices. What is good for cannabis users and patients is less likely to please cannabis investors.
Between January 2019 and the end of August 2019, the stock of cannabis flowers increased from around 137 tons (20 tons of finished products and 117 tons of unfinished products) to a total of more than 388 tons (60 tons of finished products and 328 tons of unfinished products). At the same time, only around 12.9 tons of cannabis flowers would be sold each month. This is what current data from Health Canada shows.
Some analysts are therefore already expecting a massive drop in the price of cannabis as a raw material. Matt Bottomley, cannabis analyst at Canaccord Genuity, told the Financial Post: “If most of these 328,000 kilograms are dried flowers, this will be a big problem for the licensed producers (LPs). I suspect there will be a fall in prices as supply outstrips demand.”
The stock of cannabis oil had also risen since the beginning of the year: From around 83,000 liters (unfinished and finished products) in January to more than 154,000 liters at the end of August. At the same time, only 11,705 liters of cannabis oil were sold throughout August.
Some cannabis producers have already had to close greenhouses and lay off employees because of the oversupply. At the end of October, for example, the Canadian cannabis producer Hexo announced that it would lay off 200 employees and close several greenhouses or reduce production capacity.
The Hexo stock lost more than 36 percent within one month. Moreover, Canopy Growth, the world’s largest cannabis stock company in terms of market capitalization, recently had to adjust its sales forecast. The reason: the company’s cannabis oil is selling worse than expected. The group’s share price fell by more than six percent within a month.
While the unexpected rush for investments lead to oversupply in Canada, the burgeoning European cannabis market constitutes a better alternative for investors.
Smart investments is the key to achieve high profits in the cannabis market
One cannabis company founded by two experienced North-Americans, the owners of top cannabis companies Supreme Cannabis(TSX:FIRE) and 1933 Industries (CSE:TGIF), offers investors a chance to secure their money in the rising European cannabis market.
World High Life PLC (NEX:LIFE), is aiming to become the world’s leading CBD and medical cannabis player by the acquisition of the most promising UK and European companies. WHL has just acquired UK’s leading CBD company Love Hemp Ltd. in a transaction valued at 9 million GBP.
Love Hemp produces a variety of CBD products such as sprays, vapes, oils, edibles, CBD-infused beverages, and cosmetics and sells its products in 1,200 UK high street stores. Additionally, they have agreements with big networks such as Boots, Tesco, Superdrug and Sainsbury’s. With Love Hemp, WHL plans to expand into other European markets, starting with Germany in 2020.
World High Life offers a unique opportunity to investors who will be able to access a portfolio of the most promising cannabis companies, by purchasing a single stock. WHL is not just another cannabis company, it is an investment company that brings decades of experience from the Norh-American battlegrounds and applies it to the emerging European cannabis markets.
While North-American cannabis markets struggle to overcome their issues with oversupply, the nascent European cannabis markets are attracting more and more cannabis companies and investors from over the seas.