Demand for recreational marijuana in Nevada has been much higher than expected and the state is still facing a supply shortage.
While this shortage has been a headache for dispensary owners and cultivators, these companies have seen a 200% increase in the price of marijuana in just one month.
Nevada’s Recreational Market Faces a New Issue
Initially, the Nevada recreational marijuana industry was being hampered by a lack of distributors for the retail outlets. Now, the industry is facing a problem that is not as easy to solve…cultivation constraints.
Nevada has approved 88 cultivation facilities; however, retailers are limited by what these cultivators can produce.
Nevada-based dispensaries are focused on inventory management as it is key for success. These dispensaries want to make sure they are always holding the products that in the highest demand, but they don’t want to pay 200% more than what they were paying last month.
Nevada’s Marijuana Industry Scores a Victory
Last week, Nevada marijuana companies recorded a victory after Carson City District Judge James Todd Russell denied a preliminary injunction from liquor distributors.
The companies wanted to stop the Nevada Tax Department from allowing licensed marijuana businesses transport marijuana from the cultivation facility to the dispensary.
Judge Russell also revoked a temporary restraining order that stops Nevada’s Tax Department from moving forward with application from licensed marijuana companies looking to distribute the retail product.
Two Opportunities to Watch
We recently visited several companies in the Vancouver area and during this trip, we had the pleasure of sitting down and meeting with Brayden Sutton, CEO of Friday Night Inc.
Friday Night is levered to the Nevada hemp and cannabis market through the acquisition of Alternative Medicine Association, which owns and operates a licensed medical marijuana cultivation and production facility in Las Vegas.
Alternative Medicine Association owns and operates out of 12,000 sq. ft. cannabis cultivation facility where it produces its own line of cannabis-based extracts and manufactures other third-party brands of similar products.
Marapharm Ventures (MDM.CN) (MRPHF) is another Canadian firm focused on the burgeoning legal marijuana market in Nevada and California.
In July, Marapharm announced that it had two more recreational marijuana licenses approved, a cultivation license as well as a production license for edibles and oils. A total of three licenses have been approved for recreational purposes and Marapharm has been issued business licenses by the City of North Las Vegas.
After Las Vegas approved and issued business licenses to Marapharm, it now has more than 300,000 square feet of recreational marijuana licenses. The company is well capitalized and well positioned to capitalize on this opportunity.
In late June, Marapharm reported to have received more than $12.1 million from nine warrant series offered to its shareholders. During May, Marapharm’s Directors exercised 600,000 of their stock options for $300,000, which was also received by Marapharm.
credit:420intel.com
