- PacRoots Cannabis recently updated investors following its first successful hemp harvest, which resulted in 105,000 lbs. of biomass of higher-than-expected quality
- Canadian cannabis market is currently awash in oversupply, with some estimates placing inventory stockpile at close to 3 years’ worth of demand
- Industry participants have pointed at low-quality grades as prime cause for the oversupply
- PacRoots has taken strides to improve quality of its plants, most notably through collaboration with Phenome One Corp
- PacRoots processes, sells entirety of recent harvest to the Speakeasy Cannabis Club
PacRoots Cannabis (CSE: PACR) (OTCQB: PACRF), an up-and-coming cannabis company based out of Canada, has earned a well-established reputation for producing premium quality strains and products through the use of a meticulous, genetics-focused harvest approach. Following the award of an industrial hemp license by Health Canada in May 2020, PacRoots Cannabis embarked on a joint-venture with Rock Creek Farms to plant over 130,000 premium hemp CBD plants on 100 acres of prime arable land in British Columbia (https://ibn.fm/uNUYJ). The venture has been a notable success thus far, with the company recently revealing that the initial harvest had resulted in a biomass yield of over 105 thousand pounds—the quality of which far exceeded expectations.
PacRoots’ success may soon be the industry exception rather than the rule. The Canadian cannabis market is increasingly awash with an excess supply of low-grade cannabis; Health Canada recently released industry-wide cannabis data for October 2020, which revealed that approximately 1.1 million kilograms of cannabis was being stockpiled by producers nationwide. According to industry thinktank Cannabis Benchmarks, the excess inventory—when taking into account that Canada’s monthly consumption rate—came to about 30,000 kilograms, effectively meaning that three years’ worth of supply was currently laying idle (https://ibn.fm/3FcCc).
One key factor leading to the oversupply of cannabis may be the inferior quality of the product currently available. The recent harvest of outdoor cannabis pumped an additional 220,461 kilograms of legal marijuana into the market, which has led some cannabis retailers to re-evaluate their existing inventory.
Tyler Robson, CEO of cannabis product manufacturer The Valens Co, said in an interview that the company was looking to scrap its inferior grade product now that it had better options for higher-quality material.
“Commoditization is happening quicker than people expected,” he said. “I think this is at the inflection point of this space. And we wanted to get in front of it, prior to everybody else.”
PacRoots has actively sought to improve the quality of its cannabis product, most recently through a strategic licensing agreement with Phenome One Corp. The agreement has granted PacRoots with access to one of Canada’s largest live, genetic cannabis libraries with lab and field-tested, selectively bred seedlings. The company has utilized these seedlings to grow, breed and clone its own unique brands. The tie-up in turn has allowed Pac Roots to offer customers a remarkable portfolio of over 350 meticulously-designed cultivars, ranging from CBD-dominant plants with rare terpene profiles to plants with over 30% THC-content as well as West Coast outdoor, botrytis-resistant cultivars.
As a result, despite the current oversupply in the market, PacRoots Cannabis was able to process and sell its entire harvest to the Speakeasy Cannabis Club. Furthermore, PacRoots also seized the opportunity to elaborate on its low-cost production capabilities, which the company believes will provide a decisive and sustainable competitive advantage relative to its peers while continuing to maintain healthy profit margins.
The potent mix of a high-quality product and inexpensive production costs promise to place PacRoots Cannabis Corp in a decidedly advantageous position to benefit from the sector’s ongoing woes.
For more information, visit the company’s website at www.PacRoots.ca.
NOTE TO INVESTORS: The latest news and updates relating to PACR are available in the company’s newsroom at http://ibn.fm/PACR
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