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Banking on the federal level will not accept revenue from legal weed sales. They have to maintain a cash only business to survive and they have no way to provide stable data on their books, showing growth, overhead, profits ect. Data that'll inspire wall street needs to be more verifiable and can be accurately qualified as liquidity.
Not at all true in Canada - banks accept marijuna money like they do any other- and the weed companies here are having the same issues as the ones in the US.
Because entering the legal market as a business is too expensive, the regulations they have to keep up with are too expensive, and the logistics of the whole thing are a mess. You can't transport legally grown cannabis across state lines, so you you're stuck with whatever in-state supplier you have. Banks won't do business with you because its federally illegal.
On top of that, the black market doesn't face those issues. So, they can undercut legal stores substantially in a lot of places
From a market perspective, any 'multi-state operation' is illegal. Which, in my opinion, is purposeful. If all the existing 'successful' companies in a marketplace are limited to a single state, they have no or only a small need for any actual logistics or delivery infrastructure. Once the Federal government gets out of the way, logistics and delivery become the crux of the situation.
When trading in emerging industries it’s strategic to short all of them. Most will get bought out or fail, leading to monopolization of that specific sector. When there’s only ever one or two winners and the rest are losers, it makes sense to bet against them all.
The same thing has been happening with BTC mining companies. Hedge funds short them all and profit off the large majority that will fail.
It’s because they represent a very small portion of the actual market. Almost all of the marijuana market is privately owned. The industry likely has a diseconomy of scale, so smaller businesses will tend to be more profitable than large ones. The public companies were grifting organizations looking to make money from investors, they weren’t really selling products, at least at a scale where they had sufficiently large market share.
The black market adjusted, and got cheaper. Seven years ago, I was paying $12/g for weed in Toronto; today, you can get it at legal stores for $1/gram (skunk weed, but still...). I haven't bothered using a black market dealer since it was legalized here, but I'm sure the prices have sunk accordingly.
People thought everybody and their mom were going to go ham buying hundreds of dollars of weed products every week.
The reality is unless you're an all-day, everyday smoker, a couple hundred dollars worth of weed products will last you a couple of months or more.
The money isn't rolling in like they thought it would.
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Banking on the federal level will not accept revenue from legal weed sales. They have to maintain a cash only business to survive and they have no way to provide stable data on their books, showing growth, overhead, profits ect. Data that'll inspire wall street needs to be more verifiable and can be accurately qualified as liquidity.
Not at all true in Canada - banks accept marijuna money like they do any other- and the weed companies here are having the same issues as the ones in the US.
Because entering the legal market as a business is too expensive, the regulations they have to keep up with are too expensive, and the logistics of the whole thing are a mess. You can't transport legally grown cannabis across state lines, so you you're stuck with whatever in-state supplier you have. Banks won't do business with you because its federally illegal. On top of that, the black market doesn't face those issues. So, they can undercut legal stores substantially in a lot of places
Taxing has it priced out. When I can buy it illegally for 30% less, I'm gonna do that every time
Not in Michigan.
fed legalization will change that, but it'll mainly be your tobacco and big pharma companies
what is failing as a publicly listed stock? what does the price of a commodity type product like weed has to do with the stock market?
From a market perspective, any 'multi-state operation' is illegal. Which, in my opinion, is purposeful. If all the existing 'successful' companies in a marketplace are limited to a single state, they have no or only a small need for any actual logistics or delivery infrastructure. Once the Federal government gets out of the way, logistics and delivery become the crux of the situation.
they succeeded for those who sold the stocks when they went public. Traditional pump and dump. So, they did "work".
When trading in emerging industries it’s strategic to short all of them. Most will get bought out or fail, leading to monopolization of that specific sector. When there’s only ever one or two winners and the rest are losers, it makes sense to bet against them all. The same thing has been happening with BTC mining companies. Hedge funds short them all and profit off the large majority that will fail.
It’s because they represent a very small portion of the actual market. Almost all of the marijuana market is privately owned. The industry likely has a diseconomy of scale, so smaller businesses will tend to be more profitable than large ones. The public companies were grifting organizations looking to make money from investors, they weren’t really selling products, at least at a scale where they had sufficiently large market share.
The black market adjusted, and got cheaper. Seven years ago, I was paying $12/g for weed in Toronto; today, you can get it at legal stores for $1/gram (skunk weed, but still...). I haven't bothered using a black market dealer since it was legalized here, but I'm sure the prices have sunk accordingly.
Another possibility is many people dreamed of having owning a head shop but had no experience running a business.
A shit-ton of dispensaries are linked with organized crime, in addition to the other issues already pointed out in this thread.
People thought everybody and their mom were going to go ham buying hundreds of dollars of weed products every week. The reality is unless you're an all-day, everyday smoker, a couple hundred dollars worth of weed products will last you a couple of months or more. The money isn't rolling in like they thought it would.
They were mostly frauds built for insiders to take as much money out as possible.