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2018-10-11 07:00 by Karl Denninger
in Market Musings , 108 references Ignore this thread
If You Buy Weed Stocks....
[Comments enabled]

.... you should consider investing in this as well.

You're going to need it, IMO.

These stocks are ridiculously overpriced and they will crash.  When they do you're going to want one big fat bong-riff, right here and now, to make up for the loss of value in your portfolio.

Don't get me wrong -- the legal cannabis market for both CBD (doesn't get you high) and THC (does) based products is real.  It's going to expand like a big fat bong riff in your lungs but price is always the issue with any investment.

Simply put the market isn't that big and shifting it from illegal marijuana sales to legal cannabis sales channels can't possibly result in enough revenue and thus profits to justify these valuations.

No way, no how, no matter what you do.

I'd like the idea of buying some PUTs on these companies except that their implieds are quite unfavorable and thus the POTential gains are not what I'd like.... after all these firms are not likely zeros -- just way, way overpriced.

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Robc
Posts: 33
Incept: 2009-09-10

Cincinnati
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In Cali for almost 15 years now you could get your prescription from the bong shop nurse for insomnia for a little cash. If you wanted to obtain it legally it was near effortless. It does not surprise me the market predictions didn't pan out in states that had medical laws not restricted to serious conditions.
Redjack
Posts: 97
Incept: 2018-01-29

Iowa
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Brother in law had a friend from Kellogg invest heavily in a weed start up.

He got taken for all of his investment, and then was left holding the bad after the "Partners" skipped town without filing all the correct licenses and taxes. Will be lucky to stay out of jail.

When I see a large ag seed company start selling weed hybrids, then I will know the market is legit. Bayer has some in the early stages, but they don't see the market as big enough yet.

That and I expect them to option that line off to someone else. Bayer has enough issues today.
Mangymutt
Posts: 682
Incept: 2015-05-03

Vancouver WA
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In my humble opinion the ONLY thing that makes pot stocks worth money is the same reason it made millions if not billions for the drug cartels, and is the fact that pot is still federally illegal.

It's a hearty plant and survive even the worst horticulturalist. For regular human consumption all you need to grow it is seeds, dirt, a pot (Haha that was punny) to grow it in and water.

When you are talking about the creams, balms and other valuable medical uses then you of course would want the controlled grade product.

Weed was growing LONG before Columbus "discovered" America and was being used by all sorts of people even after America made it illegal.

For long term investment Pot stocks seem like a silly way to invest, but what the hell do I know, I think FaceBook is a silly way to invest too.

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