Tilray continues to have difficulty sourcing an adequate amount of high-quality marijuana, and Kennedy expects supply issues to remain a problem in Canada for the next 18 to 24 months. According to a Marketwatch press release.

The reason: The suppliers Tilray expected to purchase from have not been able to produce the needed cannabis, despite promises before legalization that they used to pitch themselves to partners and investors.

“Some of them were lying about their funded capacity,” Kennedy said in a telephone interview with MarketWatch, adding that public companies inflated that metric because investors based their valuations on it.

As the cannabis industry was maturing, investors used an evolving set of metrics beyond revenue or profits to value the producers — in large part because recreational sales could not occur legally in Canada until Oct. 17 of last year. One popular measure used by analysts and companies alike was “funded capacity,” a number that referred to the amount of growing capacity a company had under its belt without requiring an additional capital raise. 

In many cases, though, the capacity of the Canadian public companies was theoretical and they have still been not able to produce cannabis at that scale.

“If I can go back 18 months, 12 months ago, I would have invested another $100 million, $200 million in terms of Canadian cultivation,” Kennedy said on a conference call with investors late Tuesday. “That was a — that was a mistake. But we believed, we believed all the hype 18 months ago.”