Q: I'm puzzled by the enthusiasm for this sector. Besides Government regulation, what are the barriers to entry ? What makes medical marijuana farming any different than regulated tomato farming?
I have serious reservations regarding this sector. Companies with the "hope" of producing earnings at a future point in time but with very little certainty. It looks like an arms race. Get as big as you can as fast as you can, and use other people's money because they don't know what the price of their product will be when the market becomes saturated.
What will stop people from getting a bucket of soil and seeds to grow their own?
So why would shareholders pay six-figure salaries to glorified tomato farmers who have yet to prove that they can generate steady cash-flows?
This sector reminds me of the TSX-V in 2007, people mortgaging their principal residence to buy penny stocks of jr mining companies with names they couldn't pronounce. It's like investment fantasy land, drawing novice investors in hordes. When you start to receive marijuana stock tips from cab drivers and hotdog vendors, you'll know it's time to exit.
Anyone looking to buy these stocks should really evaluate what type of investor they are before committing to the weed sector. Fast money can produce fast crashes when the money runs out.
I have serious reservations regarding this sector. Companies with the "hope" of producing earnings at a future point in time but with very little certainty. It looks like an arms race. Get as big as you can as fast as you can, and use other people's money because they don't know what the price of their product will be when the market becomes saturated.
What will stop people from getting a bucket of soil and seeds to grow their own?
So why would shareholders pay six-figure salaries to glorified tomato farmers who have yet to prove that they can generate steady cash-flows?
This sector reminds me of the TSX-V in 2007, people mortgaging their principal residence to buy penny stocks of jr mining companies with names they couldn't pronounce. It's like investment fantasy land, drawing novice investors in hordes. When you start to receive marijuana stock tips from cab drivers and hotdog vendors, you'll know it's time to exit.
Anyone looking to buy these stocks should really evaluate what type of investor they are before committing to the weed sector. Fast money can produce fast crashes when the money runs out.
