Investing In Marijuana?

[james.hendrickson]

Okay, so I've been cruising around Portland, Oregon, looking for some coworking spaces when I ran into a guy who was actively looking at starting a company in Canada to export marijuana related beauty products. With the news today that former speaker of the house John Boehner has joined the board of a marijuana company acreage holdings, I'm starting to think that marijuana businesses may be becoming mainstream.

Any of you guys considering marijuana investments?

[rennigade]

My friends buddy who he was in the military with owns a grow operation in oregon. Very profitable when it was just medical. Now that its recreational legal in those states...apparently the market became flooded with people who can grow. Now its basically a hobby where he breaks even and still has a whole lotta weed for himself. So it covers all expenses and he has plenty of product left for him.

Hemp would be the real game changer imo. That can be waaay more profitable than the buds. The amount of products that can be made out of hemp is crazy. This is just one of them: https://www.youtube.com/watch?v=Hx8OTH0eEM0

[TexasHusker]

I would have a moral problem investing in something like marijuana.

Conventional wisdom says it's no worse than cigarettes or alcohol - a little weed never hurt anyone.

My forever 23-year-old nephew once told me "Never let your kids start marijuana." He was found in his apartment by his father, dead of a drug overdose, about 2 weeks later.

[Smallsteps]

Maybe products or edibles but for the actual weed there is licensing and many regulations if you did it by state regulations. Many states have different rules some have limited licenses and the hoops to jump through can cost a lot. My state tests product and if your crop does not meet the criteria it can not be sold LEGALLY in state stores. The state tells growers to destroy and replant. lol and this is based on the honor system REALLY ??
The reality in my state and most others will find this true as well is after the novelty wears off why would someone pay $50 when on the street they can get same amount for $25.
Think about it the illegal trade was not eliminated and has now only expanded before the legal industry started.
I KNOW many who bought a couple of times when it was a new thing in my state now they buy from their regular dealer. if ever looked at as long as you have less the legal amount, the police are not looking to see receipts to make sure you paid the layers of taxes my state added to this.
I also know someone who works in a store most customers were tourists and people whom do it occasionally. As the neighboring states open the dispensaries etc I can guarantee those stores in border towns will have the business drop. The retail jobs created certainly are not high paying and we had one employee KILLED by a guy who "was having a bad day" cause he was turned away because he did not have legal ID a requirement to buy in state store. Be careful of what you wish for in this.

[rennigade]

I would have a moral problem investing in something like marijuana.

I get what you're saying but where does that mentality start/stop? Do you have any investments in car manufacturers or pharmaceutical companies? Heck people eat themselves to death...invest in any food companies?

Some kids I went to high school with are opening a brewery in my hometown. Another micro brew. Theres a really high chance they're going to be directly responsible for the death of someone...eventually. Someone will consume too much of the beer they make and end up killing themselves or someone else.

How much handle holding are we supposed to do? Shouldnt grown adults be responsible for themselves? Im not sure what the answer is...all I know is people hate to blame themselves. Poor me society.

[disneysteve]

I think it is incredibly ironic that at the very same time we are obsessing over the opioid abuse problem in this country and how we can reduce drug abuse, we are simultaneously having this tremendous push to spread and encourage the use and abuse of marijuana. It makes absolutely no sense.

The medical marijuana system is a total farce. I'm not saying that marijuana might not possibly benefit certain individuals, but the system of legalized marijuana is a farce. I can tell you from firsthand experience from my practice that what patients do is they go through the steps to get their medical marijuana card and then continue to buy pot from their local street dealer just as they always have.

Legalizing medical marijuana does absolutely nothing to the illegal market. In fact, it probably benefits the illegal market because once you remove the threat of arrest or incarceration, people smoke even more freely than they did previously. They know that if they get caught, all they have to do is wave their medical marijuana card and they're free to go.

And no, I don't think you can equate cars or hamburgers with addictive drugs or even alcohol.

[Smallsteps]

I get what you're saying but where does that mentality start/stop? Do you have any investments in car manufacturers or pharmaceutical companies? Heck people eat themselves to death...invest in any food companies?
.

I find statements like this and other catch phases and trigger issues associated with the discussion of the future of legalization insulting and miss the point entirely
First of all regardless of the product we have taken the CONSUMER and personal responsibility completely out of the equation. Is everyone an addict / alcoholic or obese no, BUT some are.
You cannot predict the abuse of a product but society at this point seems to think to go after the money or those invested.
A very small percentage of those whom have taken pain pills become heroin addicts but the push to go after DRs and big pharma as if EVERY prescription leads to addiction.

Perhaps the best approach is dual investments ... ,marijuana industry and rehab clinics or high risk insurance or even long term care options for those with increasing problems . Perhaps alternative banking or legal loopholes to money laundering options since most in the legal trade cannot run their businesses like a normal ones because of federal banking regulations.

Much like the parent company of Sara LEE treats also make Hanes sweatpants you get money coming and going...... eat enough Sara Lee sweatpants is all you will be wearing.

[rennigade]

I think it is incredibly ironic that at the very same time we are obsessing over the opioid abuse problem in this country and how we can reduce drug abuse, we are simultaneously having this tremendous push to spread and encourage the use and abuse of marijuana. It makes absolutely no sense.

The medical marijuana system is a total farce. I'm not saying that marijuana might not possibly benefit certain individuals, but the system of legalized marijuana is a farce. I can tell you from firsthand experience from my practice that what patients do is they go through the steps to get their medical marijuana card and then continue to buy pot from their local street dealer just as they always have.

Legalizing medical marijuana does absolutely nothing to the illegal market. In fact, it probably benefits the illegal market because once you remove the threat of arrest or incarceration, people smoke even more freely than they did previously. They know that if they get caught, all they have to do is wave their medical marijuana card and they're free to go.

And no, I don't think you can equate cars or hamburgers with addictive drugs or even alcohol.

Everyone is obsessing over opioids because dead bodies are showing up all over the country...from opiods. If you have any kind of surgery or pain...you can get a doctor to prescribe opiods. And as you should know...they're addictive. What happens when a doctor will no longer prescribe the pills because everyone and their brother can see how the patient is abusing the pills? They turn to heroin. The potency is always different, could be cut with who knows what..next thing you know someone overdoses and dies. Its so common...thats probably why its a big deal.

Yes...for a massive majority of people the medical mj industry is bogus. They're just trying to not get in trouble for smoking weed. Why buy it from your weird neighbor when you can walk into a store and do it legally?

Why would you want to throw someone in a cage for smoking or selling weed? Thats the part a lot of people struggle with. Just do a simple internet search and you can find out why it was made illegal. From political moves, from wealthy people who wanted to make more money...and really it was just a great way to arrest blacks and mexicans (yea...its true.) No one ever cared about the affects of marijuana...that had nothing to do with why it was ever made illegal in the first place but people still think its this hardcore gateway drug...usually the hypocrites who never tried it but believe the reefer madness propaganda.

And if you did try mj and moved on to harder stuff...you would have found those drugs anyway. Those people dont need any help from anyone...ive seen it plenty with my friends.

[rennigade]

I find statements like this and other catch phases and trigger issues associated with the discussion of the future of legalization insulting and miss the point entirely
First of all regardless of the product we have taken the CONSUMER and personal responsibility completely out of the equation. Is everyone an addict / alcoholic or obese no, BUT some are.
You cannot predict the abuse of a product but society at this point seems to think to go after the money or those invested.
A very small percentage of those whom have taken pain pills become heroin addicts but the push to go after DRs and big pharma as if EVERY prescription leads to addiction.

Perhaps the best approach is dual investments ... ,marijuana industry and rehab clinics or high risk insurance or even long term care options for those with increasing problems . Perhaps alternative banking or legal loopholes to money laundering options since most in the legal trade cannot run their businesses like a normal ones because of federal banking regulations.

Much like the parent company of Sara LEE treats also make Hanes sweatpants you get money coming and going...... eat enough Sara Lee sweatpants is all you will be wearing.

Hmm...im having trouble following you but I believe we're in the same boat. It seems like you misunderstood what I said...or just didnt read anything past that sentence. I was being sarcastic.

[disneysteve]

Why would you want to throw someone in a cage for smoking or selling weed?

Here's an idea. If you don't want to get locked up, don't commit the crime.

[Smallsteps]

or just didnt read anything past that sentence. I was being sarcastic.

I did read it and while the rest of post suggests we both agree on "customer responsibility" the original line does not ring like sarcasm to me.

The comparison line is the same line is used in almost every discussion on this subject I have read or heard.
I find it interesting that in the response to another post you mentioned the street dealers cutting of heroin and potency variations with out any acknowledgement that the SAME EXACT thing happens to MJ.

WHY would ANYONE pay 2x the price at a legal store ( taxes added on at the grow and retail ends of product in my state anyway) compared to their weird neighbor or whatever?
Pot users must just have extra money and feel a CIVIC duty to pay extra taxes into the state that must be it right?

Not sure of ALL the different states versions of rules but in my state they test for potency keeping it at a certain level .... while street versions can and are more potent and laced with who KNOWS what.
Maybe there are certified ORGANIC street dealers or a trade organization standards. ( now that is sarcasm )
Same deal as other drugs so that argument just went up in a puff of smoke.

So I guess until bodies start piling up that argument can only be used for heroin. Oh wait there was just 3 deaths on some sort of synthetic weed in the Midwest.

[JBinKC]

I happen to own AOI in my portfolio. They are mainly a distributor of tobacco products who happened to recently use their advantage of current distribution channels by branching out into marijuana.

The stock also carries a very low PE ratio and low share float but carries a high debt level.

[james.hendrickson]

I had a look at AOI - no dividend. Whats your thinking on the future value?

[JBinKC]

I had a look at AOI - no dividend. Whats your thinking on the future value?

I originally bought shares this summer given the operating leverage it has. Not too many companies sell at a small fraction to price/ sales or a low book value.

There has been no pro forma expectations on this potential new business so I don't really know but they do have an advantage of scale and existing distribution channels so the added costs for this business is likely negligible.

I wouldn't expect a dividend soon looking at their high long term debt levels.

If the firm didn't have the potential business catalyst I would have sold all of my position by now, however what I have done is take my cost out of the position and see how my " free" shares pan out.

[rennigade]

I find it interesting that in the response to another post you mentioned the street dealers cutting of heroin and potency variations with out any acknowledgement that the SAME EXACT thing happens to MJ.

I cant say I ever heard of anyone cutting random stuff with weed. Im not even sure how that would go down since it comes in a bud form. I guess if you're buying some low grade garbage of stems and such. Maybe the buds could be dipped in embalming fluid?

WHY would ANYONE pay 2x the price at a legal store ( taxes added on at the grow and retail ends of product in my state anyway) compared to their weird neighbor or whatever?
Pot users must just have extra money and feel a CIVIC duty to pay extra taxes into the state that must be it right?

For starters...its safe (in terms of not getting mugged.) Consistency of the product. Again safe in terms of it being cut with stuff...although I still never heard of this. Convenience. Walk in and purchase...no need to track someone down. So yes...I would def pay a premium for safety. I like to think human lives are worth more than saving tree fiddy.

So I guess until bodies start piling up that argument can only be used for heroin. Oh wait there was just 3 deaths on some sort of synthetic weed in the Midwest.

Yeah that synthetic stuff is nasty...although I wouldnt even classify that as weed. Thats dangerous stuff they sell at head shops...like those bath salts. Darwin will find those who consume synthetic stuff made in a dirty basement.