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Aphria Sees Consolidation Ahead For Cannabis Industry

November 14, 2018

The cannabis industry is emerging at a rapid rate, but key players see the potential for significant consolidation moving forward, with the ranks of mid-level producers expected to thin out over time. In an interview with Bloomberg, Diageo veteran Jakob Ripshtein, who was recently promoted to president of cannabis producer Aphria, said he sees a shakeout in the industry looking ahead.

Ripshtein said he expects cannabis to eventually feature “a group of companies at the top, the big producers, and some smaller producers at the bottom, like craft beer,” adding that the landscape could be challenging for mid-sized companies. He also addressed concerns of product shortages, with Canada’s recreational market getting underway last month. Aphria CEO Vic Neufeld said just prior to the recreational rollout on October 17 that Aphria could have difficulty meeting demand in the first two to three months of sales. But Ripshtein told Bloomberg that he believes those issues will be ironed out by early next year.

Meanwhile, with Aphria linked to potential suitors including Ste. Michelle Wine Estates parent Altria in recent months, Ripshtein said Aphria has had “conversations with a variety of industries” and that he does believe established corporate players partnering with emerging producers will play a role in driving the industry forward.—Daniel Marsteller

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