Cannabis-producing companies rely on legal authorization to operate and market their products for medical or recreational use.
In the US, the average growth in production and consumption is 16.4% per year and the market is estimated at 40 billion dollars.
The “waves” of cannabis production and consumption are: (1) decriminalization; (2) medical adoption; (3) massive investments; (4) bubble burst, deflation and market saturation; (5) stratification, consolidation and market integration, similar to alcohol.
The risks for this business are: legal restrictions, price reductions, excessive taxation and advertising limitation.
The Cash Flow method must consider efficiency, profitability, production scale, costs, brand, distribution network, institutional investor entry, location, possible M&A among others.
Governments have collected millions in taxes on these products and regulatory agencies play an important role in regulating production and consumption.
