The Need For Weed

[The_Dude]

10 hours ago, KD in CA said:

 

There you go....pot zones you out, reduces your reflex times.  Not good things when operating several thousand pounds of machinery at high speeds.

 

 

 

 

Ok. Sure. So what’s your point? Cough syrup does that too. 

9 hours ago, Rob's House said:

Am I missing something, or is this a debate about nothing?

 

The Feds don't control state drug laws, so what difference does it make what the President thinks about it?

 

I believe it’s an issue that can sway votes

[bdutton]

On 2/28/2019 at 7:10 PM, KD in CA said:

While I agree with legalization, I think the Dems are mis-calculating here.  There are still a lot people who just pass on grass and will be turned off by this.

 

You can't seriously suggest you'd vote for Pocahontas or Cammy over Trump because of weed laws that are mostly ignored anyway.

Didn't read the whole thread...

 

I agree with your points.

 

Congress should remove Marijuana from Schedule 1 to Schedule 4 drug category.  It has no purpose to be classified with a drug like Heroin.

 

Congress should also decriminalize the personal use.  Restrict the transportation to no more than one ounce between state lines without a federal license.  

[The_Dude]

On 2/28/2019 at 7:10 PM, KD in CA said:

While I agree with legalization, I think the Dems are mis-calculating here.  There are still a lot people who just pass on grass and will be turned off by this.

 

You can't seriously suggest you'd vote for Pocahontas or Cammy over Trump because of weed laws that are mostly ignored anyway.

 

No way is Pocahontas the nominee. 

[KD in CA]

4 hours ago, The_Dude said:

 

Ok. Sure. So what’s your point? Cough syrup does that too. 

 

I believe it’s an issue that can sway votes

 

Which is why there’s a big ‘do not operate machinery’ warning on the side of cough syrup.

 

My point is the point made by Rob about DWH concerns are valid. 

[Bob in Mich]

On 3/1/2019 at 4:23 PM, RochesterRob said:

  Long term?  None.  It will be a commodity just like corn or wheat.  It will be over produced to the point of being near worthless just like corn and wheat have been for most of the last 100 plus years in the US.  All the regulations and licensing will not prevent overproduction.  I listened to a news report yesterday that said that the black market is adapting well in states where it is legal.  If I were a financial advisor IF you wanted in as an investor my advice would be to get back out within a year or two years at the latest before the suckers figure out pot is not a magical profit industry.  Now to build my time machine to go back to 1986 to tell myself to buy 100 shares of Microsoft (of which I had the money then to do so) at the IPO.  Or better yet tell myself that the years 1983-1986 should all be about earning money to put into Microsoft.

 

I am not a financial advisor and am not recommending any stocks that I may discuss.

 

Rob, while I agree that after a time most cannabis may be sold by the bushel, I disagree strongly that there are no long term winners among the cannabis stocks.  The eventual overall market is estimated to be in the hundreds of billions of dollars, worldwide.  That money is going to go somewhere.  It is not simply the sale of smoking buds that will drive the growth but instead, cannabis will become an ingredient in a myriad of products, imo.

 

Certainly the low cost producers will be winners along with many other new or niche players.  The medical marijuana market may outpace the adult use market, especially since it seems to have higher margins and medical cannabis seems likely to gain acceptance country-by-country years ahead of adult use legalization.  This area is just in its infancy in its acceptance, again across the globe.

 

Within adult use, with legalization there will be a bunch of new products.  I understand in the Canadian adult use market has embraced THC gelcaps.  Also, organic cannabis producers are carving out a niche.  Organically grown cannabis will make money for someone, again with higher margins than the commodity cannabis. 

 

There are other markets to be made in vape pens/cartridges, edibles, THC adult use beverages, CBD wellness beverages, CBD skin care products, and many other 'over the counter' health issues - pain, sleep, appetite, anti-anxiety, etc. along with pet products for many of the same issues.  Companies are going to make money in all of these areas and when that happens with publicly owned companies, stock holders will realize gains.

 

Bruce Linton, CEO of Canopy Growth was on Jim Cramer's show not long ago. 

 

http://www.cnbc.com/video/2019/01/09/canopy-growth-ceo-talks-offering-cannabis-based-opioid-alternatives.html

Edited March 3, 2019 by Bob in Mich

[The_Dude]

7 minutes ago, KD in CA said:

 

Which is why there’s a big ‘do not operate machinery’ warning on the side of cough syrup.

 

My point is the point made by Rob about DWH concerns are valid. 

 

The validity of their hesitations does not negate the fact that marijuana was made illegal arbitrarily, and arguably unconstitutionally. It's status as a schedule 1 drug is beyond ridiculous.

Somethings require responsibility. Driving. Guns. Alcohol. Cough syrup. Weed. They require the responsibility of the user. Responsibility and common sense unfortunately cannot be legislated.  

[RochesterRob]

8 minutes ago, Bob in Mich said:

 

I am not a financial advisor and am not recommending any stocks that I may discuss.

 

Rob, while I agree that after a time most cannabis may be sold by the bushel, I disagree strongly that there are no long term winners among the cannabis stocks.  The eventual overall market is estimated to be in the hundreds of billions of dollars, worldwide.  That money is going to go somewhere.  It is not simply the sale of smoking buds that will drive the growth but instead, cannabis will become an ingredient in a myriad of products, imo.

 

Certainly the low cost producers will be winners along with many other new or niche players.  The medical marijuana market may outpace the adult use market, especially since it seems to have higher margins and medical cannabis seems likely to gain acceptance country-by-country years ahead of adult use legalization.  This area is just in its infancy in its acceptance, again across the globe.

 

Within adult use, with legalization there will be a bunch of new products.  I understand in the Canadian adult use market has embraced THC gelcaps.  Also, organic cannabis producers are carving out a niche.  Organically grown cannabis will make money for someone, again with higher margins than the commodity cannabis. 

 

There are other markets to be made in vape pens/cartridges, edibles, THC adult use beverages, CBD wellness beverages, CBD skin care products, and many other 'over the counter' health issues - pain, sleep, appetite, anti-anxiety, etc. along with pet products for many of the same issues.  Companies are going to make money in all of these areas and when that happens with publicly owned companies, stock holders will realize gains.

 

Bruce Linton, CEO of Canopy Growth was on Jim Cramer's show not long ago. 

 

http://www.cnbc.com/video/2019/01/09/canopy-growth-ceo-talks-offering-cannabis-based-opioid-alternatives.html

  The trouble is it will be nearly impossible to bottle neck pot so a clear cut winner can glean profits.  The low cost producers will still be the cartels who grow it outside the borders and do not have to pay US type property taxes, US minimum wage, or have USDA or FDA inspectors oversee cultivation.  They already have the land, labor, and skill to grow quality MJ.  For a while legal pot will surge ahead due to convenience but will fall behind the black market once the novelty of buying it at Walgreen's has worn off and the "respect" that goes with it.  Fees and taxes will make black market pot very appealing to most of America in short order and most of America does not have to travel to a dangerous part of a city to purchase it.  Form will be minimally important versus cost.  I would bet that Zeneca, Pfizer, and the rest already have plans to capitalize on the processed products once they become legal.  The publicly traded companies will no doubt see their value increase but I just don't see a 1986 Microsoft IPO type stock ready to jump from the ground into orbit in short order.

[The_Dude]

Just now, RochesterRob said:

  The trouble is it will be nearly impossible to bottle neck pot so a clear cut winner can glean profits.  The low cost producers will still be the cartels who grow it outside the borders and do not have to pay US type property taxes, US minimum wage, or have USDA or FDA inspectors oversee cultivation.  They already have the land, labor, and skill to grow quality MJ.  For a while legal pot will surge ahead due to convenience but will fall behind the black market once the novelty of buying it at Walgreen's has worn off and the "respect" that goes with it.  Fees and taxes will make black market pot very appealing to most of America in short order and most of America does not have to travel to a dangerous part of a city to purchase it.  Form will be minimally important versus cost.  I would bet that Zeneca, Pfizer, and the rest already have plans to capitalize on the processed products once they become legal.  The publicly traded companies will no doubt see their value increase but I just don't see a 1986 Microsoft IPO type stock ready to jump from the ground into orbit in short order.

 

Look, if I want moonshine (and I never do) I go to the liquor store. I have friends how make their own. I mean, people are gonna do what they're gonna do. The question is what should people be imprisoned for doing.

[RochesterRob]

3 minutes ago, The_Dude said:

 

Look, if I want moonshine (and I never do) I go to the liquor store. I have friends how make their own. I mean, people are gonna do what they're gonna do. The question is what should people be imprisoned for doing.

  A guy asked if there was money to be made on pot stocks such as what pops up for ads on the internet and I answered him.

[Bob in Mich]

6 minutes ago, RochesterRob said:

  The trouble is it will be nearly impossible to bottle neck pot so a clear cut winner can glean profits.  The low cost producers will still be the cartels who grow it outside the borders and do not have to pay US type property taxes, US minimum wage, or have USDA or FDA inspectors oversee cultivation.  They already have the land, labor, and skill to grow quality MJ.  For a while legal pot will surge ahead due to convenience but will fall behind the black market once the novelty of buying it at Walgreen's has worn off and the "respect" that goes with it.  Fees and taxes will make black market pot very appealing to most of America in short order and most of America does not have to travel to a dangerous part of a city to purchase it.  Form will be minimally important versus cost.  I would bet that Zeneca, Pfizer, and the rest already have plans to capitalize on the processed products once they become legal.  The publicly traded companies will no doubt see their value increase but I just don't see a 1986 Microsoft IPO type stock ready to jump from the ground into orbit in short order.

 

You are missing a major point in that most cannabis will be sold as an ingredient to legal consumer product producers.  These large companies will buy from legal operators, not illegal producers. 

 

Individual bud smokers may continue to buy buds from the guy down the street for a time but I have lived through a time in Michigan where the option opened up to go to legal dispensaries and/or farmer's markets.  Those increased options and the falling prices that come with competition are pretty attractive to smokers.  IMO, they will eventually come to prefer those to the black market dealer, if prices are in the same ballpark.  

 

There will be some tremendous cannabis stock winners in the future just as there has already been some terrific buys.  As examples, I bought my first GW Pharmaceuticals shares under $10.  They closed at $177 Friday.  I sold Canopy Growth shares last year for over $50 that I bought under $3.  The cannabis stocks are extremely volatile and there will be runs and crashes within the segment.  IMO though, the cannabis stocks hold tremendous opportunity for the knowledgeable investor.

 

[The_Dude]

48 minutes ago, RochesterRob said:

  A guy asked if there was money to be made on pot stocks such as what pops up for ads on the internet and I answered him.

 

I misunderstood. My apologies. And after rereading, you’re not wrong. I wouldn’t invest in any of them yet. 

[RochesterRob]

34 minutes ago, Bob in Mich said:

 

You are missing a major point in that most cannabis will be sold as an ingredient to legal consumer product producers.  These large companies will buy from legal operators, not illegal producers. 

 

Individual bud smokers may continue to buy buds from the guy down the street for a time but I have lived through a time in Michigan where the option opened up to go to legal dispensaries and/or farmer's markets.  Those increased options and the falling prices that come with competition are pretty attractive to smokers.  IMO, they will eventually come to prefer those to the black market dealer, if prices are in the same ballpark.  

 

There will be some tremendous cannabis stock winners in the future just as there has already been some terrific buys.  As examples, I bought my first GW Pharmaceuticals shares under $10.  They closed at $177 Friday.  I sold Canopy Growth shares last year for over $50 that I bought under $3.  The cannabis stocks are extremely volatile and there will be runs and crashes within the segment.  IMO though, the cannabis stocks hold tremendous opportunity for the knowledgeable investor.

 

  It's not about who the companies buy from but whether they can control the production process to transform a raw ingredient into a finished product.  If they can not derive a patent for the finished product then the markup will be minimal therefore any return to investors will be minimal.  The alternative would be that processing would require a tremendous investment that virtually no one else could match that a barrier to entry would be thrown up allowing a producer to set their own profit margin.  I don't see the production of cannabis such as oil requiring investment to the point where only a handful could engage in production.  

 

  You also underestimate the resolve of the black market dealer to stay in business.  Or alternatively that the changing government policy will drive him to go legit or change professions.  A fair amount of cost of a pack of regular tobacco or a bottle of liquor is tax and regulations such as testing for product safety.  A black market dealer does not have to be concerned about those and has already established a cost structure that tells him he can make a profit undercutting Walgreen's.   If anything Walgreen's will force him to become a better competitor with issues such as quality.  Sell a quality product or be forced out.  

 

  As I told the other poster there will be opportunities short term but the key is not to hold stocks long term like you would other stocks.  Change in the industry may turn a winner into a loser in a matter of months.

[Nanker]

***** you stoner pot heads. Bad enough you stink up the air but now you’re responsible for putting dog in the vet hospitals. 

 

https://www.capecodtimes.com/news/20190302/pot-dogs-growing-concern-for-pet-owners

 

Dirtbags. 

[RaoulDuke79]

On 2/28/2019 at 6:47 PM, The_Dude said:

https://www.foxnews.com/politics/cory-booker-other-2020-dem-presidential-hopefuls-introduce-federal-marijuana-legalization-bill

 

First, no conservative can make a conservative argument for the government, without congress, arbitrarily making a non-lethal, non-habit forming FLOWER illegal. 

 

Second, if republicans don’t do an about-face, and get on the right side of this now, then 2020 will be bad. 

 

If my vote comes down to conservative policies and righting a great injustice, my vote and many others will be in jeopardy. 

 

The dominos are falling, get right NOW. 

 

There are more pressing issues that I'd prefer to hang my hat on than whether or not weed is legal. It's  not going to change my activities one way or another except where I buy it.

[Bob in Mich]

59 minutes ago, RochesterRob said:

  It's not about who the companies buy from but whether they can control the production process to transform a raw ingredient into a finished product.  If they can not derive a patent for the finished product then the markup will be minimal therefore any return to investors will be minimal.  The alternative would be that processing would require a tremendous investment that virtually no one else could match that a barrier to entry would be thrown up allowing a producer to set their own profit margin.  I don't see the production of cannabis such as oil requiring investment to the point where only a handful could engage in production.  

 

  You also underestimate the resolve of the black market dealer to stay in business.  Or alternatively that the changing government policy will drive him to go legit or change professions.  A fair amount of cost of a pack of regular tobacco or a bottle of liquor is tax and regulations such as testing for product safety.  A black market dealer does not have to be concerned about those and has already established a cost structure that tells him he can make a profit undercutting Walgreen's.   If anything Walgreen's will force him to become a better competitor with issues such as quality.  Sell a quality product or be forced out.  

 

  As I told the other poster there will be opportunities short term but the key is not to hold stocks long term like you would other stocks.  Change in the industry may turn a winner into a loser in a matter of months.

 

You make some valid points.  I would strongly agree that cannabis stocks are not ‘set em and forget em’ investments.  There are many more catalysts impacting cannabis companies than your typical company.  That is why I mentioned knowledgeable investors.

 

I also noticed that you morphed your argument. Your earlier point was that cartels or illegal growers could provide cannabis more cheaply and so would dominate. I pointed out that legal large scale companies would only purchase from legal growers.

 

Your latest response argues that it is not about low cost production.  You morphed that into a ‘barrier to entry’ argument.  You now state that without a large barrier to entry no producer can make large profits. To an extent this is true but it is a different point.  Countering that point, Linton points out in his video, not many people talk about sugar producers but look at how many companies can make money off packaged goods containing sugar.

 

Time will tell if you are right and the black market will prevent legal entities from achieving great growth. I believe you are wrong but we shall see. Thanks for the discussion

[reddogblitz]

2 hours ago, RochesterRob said:

Fees and taxes will make black market pot very appealing to most of America in short order and most of America does not have to travel to a dangerous part of a city to purchase it.

 

I don't know where this black market cheaper argument comes from.  I have some experience with this and will tell you I can now buy in a legal store without dealing with criminals what used to cost me $50 pre legalization for $35.

[RochesterRob]

2 minutes ago, reddogblitz said:

 

I don't know where this black market cheaper argument comes from.  I have some experience with this and will tell you I can now buy in a legal store without dealing with criminals what used to cost me $50 pre legalization for $35.

  Very simple.  Pre-legalization the black market people had you by the balls hence 50 dollars.  Now with legalization where you live the product is 35 dollars.  The black market people now have the choice of either lowering the price to the point of giving you an incentive to buy from them or more or less get out of business.  The black market people in most instances have chosen to adapt by competing with government approved sellers.  This has already been seen in states where pot has been legal for a while now.  If your black market dealer for whatever reason cannot adapt then he will be replaced by someone who can sell in the current environment where you live.  

[RochesterRob]

21 minutes ago, Bob in Mich said:

 

You make some valid points.  I would strongly agree that cannabis stocks are not ‘set em and forget em’ investments.  There are many more catalysts impacting cannabis companies than your typical company.  That is why I mentioned knowledgeable investors.

 

I also noticed that you morphed your argument. Your earlier point was that cartels or illegal growers could provide cannabis more cheaply and so would dominate. I pointed out that legal large scale companies would only purchase from legal growers.

 

Your latest response argues that it is not about low cost production.  You morphed that into a ‘barrier to entry’ argument.  You now state that without a large barrier to entry no producer can make large profits. To an extent this is true but it is a different point.  Countering that point, Linton points out in his video, not many people talk about sugar producers but look at how many companies can make money off packaged goods containing sugar.

 

Time will tell if you are right and the black market will prevent legal entities from achieving great growth. I believe you are wrong but we shall see. Thanks for the discussion

  I did not morph anything.  I addressed your points as you raised them.  I did not back away from any previous statements.  The cartels will still be there because people will buy their product from a local dealer.  Large scale companies for direct sale or processed into a refined good may buy from any number of sources.  Say there is a drought that reduces tonnage in a given year.  There is no law saying that sales have to be reduced to strictly domestically produced sources.  Whoever supplies Walgreens will simply look to other sources to fill anticipated sales volume for that year.  Cartels will simply deal with or create export companies to sell to domestic retailers and it will be up to FDA and the US Attorney General/ Justice Dept to see if they want to interfere in that process.  Doubtful that they would interfere in production of a good that is legal at its end destination.  It would be considered harassment just like if they wanted to go after an export company that was selling wheat to a processor such General Mills in the US.

[Bob in Mich]

43 minutes ago, RochesterRob said:

  I did not morph anything.  I addressed your points as you raised them.  I did not back away from any previous statements.  The cartels will still be there because people will buy their product from a local dealer.  Large scale companies for direct sale or processed into a refined good may buy from any number of sources.  Say there is a drought that reduces tonnage in a given year.  There is no law saying that sales have to be reduced to strictly domestically produced sources.  Whoever supplies Walgreens will simply look to other sources to fill anticipated sales volume for that year.  Cartels will simply deal with or create export companies to sell to domestic retailers and it will be up to FDA and the US Attorney General/ Justice Dept to see if they want to interfere in that process.  Doubtful that they would interfere in production of a good that is legal at its end destination.  It would be considered harassment just like if they wanted to go after an export company that was selling wheat to a processor such General Mills in the US.

 

There are indeed laws in many countries and in many US states restricting commercial use to in-country or in state product, or at worst, government approved imports.  ‘Seed to sale’ is the term often given to plant-product tracking.  There will be no legal large scale cannabis purchases from foreign cartels, period.  You are mistaken here I believe.

 

There is is no way that say Pepsi or General Mills would risk their reputations by purchasing ingredients from dubious sources. The savings would be minuscule relative to the potential for loss for using untested or illegal sources.  

 

Have you bought smoking buds for yourself? Did you prefer the fresh, fragrant, potent buds that were locally grown or did you prefer the compressed crappy Mexican buds mixed with bugs and small rocks and dirt?  Most folks, once the price gets close, would choose the former and will in the future.  

That leaves the basement grower as the chief black market competition.  Today, rather than $400 for an ounce of great bud, lots of folks can easily find $250 zips legally.  To compete the illegal grower needs to sell for half his former price. At some point, most local illegal growers will give it up too. There will always be hobbyists because it is interesting and rewarding to supply one’s own needs but just like moonshiners today, they will be pretty uncommon

 

[RochesterRob]

16 hours ago, Bob in Mich said:

 

There are indeed laws in many countries and in many US states restricting commercial use to in-country or in state product, or at worst, government approved imports.  ‘Seed to sale’ is the term often given to plant-product tracking.  There will be no legal large scale cannabis purchases from foreign cartels, period.  You are mistaken here I believe.

 

There is is no way that say Pepsi or General Mills would risk their reputations by purchasing ingredients from dubious sources. The savings would be minuscule relative to the potential for loss for using untested or illegal sources.  

 

Have you bought smoking buds for yourself? Did you prefer the fresh, fragrant, potent buds that were locally grown or did you prefer the compressed crappy Mexican buds mixed with bugs and small rocks and dirt?  Most folks, once the price gets close, would choose the former and will in the future.  

That leaves the basement grower as the chief black market competition.  Today, rather than $400 for an ounce of great bud, lots of folks can easily find $250 zips legally.  To compete the illegal grower needs to sell for half his former price. At some point, most local illegal growers will give it up too. There will always be hobbyists because it is interesting and rewarding to supply one’s own needs but just like moonshiners today, they will be pretty uncommon

 

  Most laws concerning sales and usages generally do not apply to large volume bulk commodities such as grains.  I would imagine similar practices would prevail with MJ although entirely possible the US could craft a law restricting the legal importation of MJ.  But as of today I don't see a law readily applicable to potential MJ importation.  

 

  Why would imported grain have to be dubious?  The US at times has brought in foreign grain and livestock in large part to depress prices in this country.  Today quality is greatly controlled compared to 35 years ago.  A barge of wheat would not even be unloaded if it did not meet certain criteria such as the falling number which is important for baking applications.

 

  One of the benefits of legalization will be that the quality will be raised and anybody hoping to sell MJ will have to match prevailing standards.  Many non legit sources have room in their budget to compete.  If you are not collecting sales tax then you don't have to worry about accounting for it later via a payment to the government.  Foreign producers do not have to pay the prevailing wages that are seen in the US along with providing benefits nor be subjected to property taxes at the rate that many US farmers see.  If a legit supply system can have pot at the counter at 250 dollars per ounce a system that bypasses certain fixed costs ought to be able to undercut that.  A black market seller may not enjoy having his margin trimmed but he will have to do that.  He certainly will not be rolling fat punching the clock at Walmart. 

Edited March 4, 2019 by RochesterRob