Before You Buy a Weed Stock – The Problems With Marijuana Companies
Before You Buy a Weed Stock – The Problems With Marijuana Companies
Before you buy a weed stock, or tell someone else to do so, make sure you understand these fundamental risks… Richard is NOT a financial adviser, and the points expressed in this video are Richard’s opinion. Richard does not have any position in marijuana stocks.
Other concerns:
-Some marijuana companies have been issuing shares at a rapid pace, increasing the risk of dilution for current shareholders.
-Companies acquiring their competitors face a lot of execution risk as they integrate their targets. Plants may need to shut down, employees may need to retrain, and systems may need to be updated. Any problems along the way could impact the benefit these acquisitions provide the firm.
-If provinces adopt a government-backed outlet system for selling marijuana similar to alcohol, marijuana companies could face price pressure. The outlets would have significant buying power, allowing them to demand discounts on bulk orders.
-As many of these companies are only a few years old, their accounting statements and disclosures are not of the same level of quality as more established firms. This means less information for investors looking to own the company.
– The barriers to producing marijuana are likely to fall over time. This will open the door to competitors, including large pharma companies. If a international pharmaceutical company were to open a medical marijuana operation, startups would have a hard time matching their capital commitments.
DISCLAIMER:
Richard does not have a personal holding in any of the referenced companies. The videos on this channel are for education purposes only and do not constitute financial advice. Richard does not have a personal position in any of the companies mentioned. Richard Coffin is not registered to provide investment advice and as such does not provide recommendations on The Plain Bagel – those looking for investment advice should seek out a registered professional. Richard is not responsible for investment actions taken by viewers and his content should not be used as a basis for investment trades.
What do you think about weed as a commodity? You mentioned that "people will be able to grow marijuana at home" but the same is true of other harvests.
Consumption may well grow with legalization, since weed will be less stigmatized in the mainstream.
What do you think about weed ETFs?
damn why is weed still so expensive in 2021 then ?
Help me get my foot into something in the short long term.
Short Short term today to be t pay period (see how will I buy burgers or rent today
Short long is goals in a few periods up, short long tends to be rent, food, beer and so on in past a month
Long short term is stuff in the making, Years onwards, or even just a year.
Long long is retirement or even tax dodge for descendants to keep a richer ownership . 5+ years.
Seems like the smarter investment would be in Taco Bell, Pizza Hut, Doritos, and Visine.
I’d love to hear a party pooper video about your thoughts on Tesla. Awesome work bud!
Good read!
time- as a remedy of all pain -proves the validity of plain bagel’s legitimate concerns.
Loved your intro
Thank you for making this video. I’m interested in investing but not very knowledgeable about it, so I find your advice extremely helpful! Warnings are just as useful as positive advice. Maybe _more_ useful overall.
I live in Brooklyn and your right, you can’t just open shop and start selling weed here.
Really good video. Fundamentally, shorting on weed stocks seems like a good idea.
The total North American market assumption sounds way low. Is that just retail or total supply chain sales? State of Washington with 7.4 million people total sales through 2018 so far is about $ 1.5 Billion. https://502data.com/
I have a few points based on your video, then a few questions if you don’t mind.
1. You mention growing at home. I can also grow corn at home, but space, time, and quality are an issue. It is easier to just buy it, and know what I’m getting.
2. Look at the US prohibition on alcohol, and gambling. Alcohol is now legal, and they come down hard on illegal production. Gambling in states with legal gambling (Indiana for example), the excise police bust any illegal gambling. It is hard to have a football pool at a bar. If pot was legal and taxed, the illegal would slowly go away. The average person isn’t going to risk jail or fines on something they can obtain legally.
Now my question if you don’t mind. I’m 45, and not a pot smoker. I have about $500 invested in pot stocks. 3 of the 4 companies you mentioned, and 1 other. In my line of work I make over $500 a day, so it is of very little risk to me. Would you still consider it a bad investment? I looked at it as something to buy, and just sit on. Thank you.
Cannabis its just like microsoft and apple in 90s
Investing into fertilizer is your smartest choice as companies that can produce mass quantities under fertilizer supply constraints will see huge profits.
Damm right investors wont make money from weed lmao. Its by stoners for stoners. Any big buissnes or investment type people can fuck off. Whats that you want to invest in a big corporation ? Guess what – home grown time and cut the market prices
How do get your info, id like to know about these companies in more detail. Thamks
I watched pot stock and after few years it worth nothing
avg smoker cant afford 50 an eighth. if they raise the price they will all lose money . The price point is to high , black market in 3 years will be bigger than ever
I live in Brooklyn and your right, you can’t just open shop and start selling weed here.
Cannabis stocks should make up less than 7% of your total portfolio. It’s considered speculative. As they say, the best is blessed. If you’re going to invest in a cannabis company, just go with Canopy. It’s a huge company with a giant bankroll.
So, can i huy stocks nased in canada
Going for a short now lol
Got to admit, I had shares in MS0S, however, I am seeing that Canadian LPs are the true weed and green wagon. when the US announced positive news, Canadian LPs surge higher than MS0S. When international news being announced Canadian LPs continue to rise while the US companies remain stagnant. When negative news hits, MS0S was the one who sank first and Canadian LPs tank. Company like Tilray has more influence over most US companies with higher exposure to investors due to the reason being listed in major exchange like NASDAQ, while the US companies are limited to OTC and are facing the issue to be listed on the fundamental levels.
Needless to say, you should not be high before you buy weed stocks….
Fantastic well reasoned analysis!
You didn’t talk about the medical side ,actually helping proven and there’s a lot of sick and old people out there. Like CBD helping with seizures and medical pain.. I can tell you’re not a smoker. predictions, predictions
How about HMMJ as an investment ?
I just bet on Horse # 3…..ACB……I told a friend of mine that he will be the owner of these Stocks when i am long and Gone….But for $500.00 = 65 Stocks @ $6.72….my Name will be around in Yrs 2 come…
Another great video. Although it was a party pooper you made some very good points. Where do you find all the research on these companies? Maybe a video on how you can research a company? Also one on explaining dividends would be great! Thanks
Brought up some great points.
What I would disagree with is that people will certainly switch to legal cannibas asap. No reason to go to jail when you have the option to buy legally. People didn’t continue buying moonshine after prohibition ended. Even if it costs more it’s worth it.
Convenience will drive people to buy it rather than grow it just like most people buy coffee, herbs, and fresh fruits/veggies.
I do think the use will increase once it becomes legal, as well. The deterrence of laws still affect a lot of people.
I think it will start to become more widespread and used for small ailments.
I’m guessing they have put a lot of money into figuring out how much they believe will be sold.
I haven’t invested anything so I don’t know anything about that but I do believe those points.
Well in India it’s associated with Lord Shiva n in tradition aryivedic , Marijuana is highly recommend for medical use so I welcome to India 😂😂😂 especially in Goa n Himachal Pradesh n North east part of India n by the way in my state Marijuana grows on road side
Found u on Brandon’s channel ! I’m big on marijuana stocks . Big risk big potential for reward 🙌
Great video! But I have a question – what’s your opinion on trading a cannabis etf in order to minimise the risk on any one company – would that not address the primary issues seen in the stocks themselves, by targeting a generalised uptick in the industry?
Thank you for the information.
As some of the other posts say I think that a lot of the hype is not in marijuana but more in the products you might be able to create with it, particularly beverages. For instance, Coke is potentially looking to make some sort of partnership.
There is a lot of room for isolating certain compounds in cannabis and creating a product around that. THC and CBD are two major categories of the active products, but there are many many different variations of the molecules and they all have varying effects. There could be a wide variety of products that would have many different purposes.
I’ve also been reading a decent amount about patents and I think that will be important with specific products.
With that said, I can’t say I’ve really done my research to the extend you have and that I need to be aware that I am making a gamble. I’m honestly probably not yet knowledgeable enough to make these decisions, but you have to start somewhere and you learn with doing. I’m not putting a lot of money, so if I lose it all I’m fine with that.
I am pretty certain that marijuana is going to be legalized in the US and that the stocks are going to see a big boom when that happens, but at the same time you may be right that there may not be as much money in the space.
Obsolete. Need to re-do this.
3-15-19 …Tilray stock shot up proving this guy to be wrong… I made $$$$ on Cronos. Look at the price of the stock from this video posting and now as proof. Lesson is do your OWN research before you take advice from someone else.
Why don’t you short the entire marijuana market? Free money right?
look at cigarettes and alcohol. cannabis will do fine.
Butttt Snoop Dogg and Willie Nelson said……
It will be Tulip’s crash all over again. But there will be money to be made, and to be lost.
Which one has the lowest cost of production ?
Don’t think. Just buy weed stock and TSLA, it only goes up.
Shorting marijuana stocks can be profitable because of this high valuations
1:54 I see what you did there
Where do you get your info? Ive been researshimg for months and all this stuff is new to me
Point well taken thanks for the reminder
Very narrow minded. Think pharmaceuticals. Cosmetics. Water…..
Cronos is way too high with no real numbers
Its simply a bubble, just like bitcoin was.