Investing in Cannabis? Beware the "Pipe Dream" Numbers Being Thrown Around
(Photo Credits to WDL.Org)
Farmer Finds 1Acre Plot of Cannabis on His Land, Police Estimate Street Value of $1.6M
We've all seen headlines like this. Have you caught the latest one on how the Feds could make $28Billion a year with a $23/lb tax on cannabis? After full legalization of course.
Wait... Wait, What?!
Let's stop and look at some supply and demand facts for a moment. Currently, in the USA, it is illegal to grow cannabis on a large scale like corn or wheat. Outdoor growing, on a massive scale, significantly reduces the bottom line for the farmer. I would imagine the price of cannabis dropping to $23/lb. Who's going to pay 100% tax?
Feet on The Ground, Boys
Legalization is coming, those that invest in the correct areas of the industry will make quite a chunk of change. It's easy to get excited with such huge numbers flying around, I highly recommend taking a moment to inject some reality into them.
When supply increases, prices will drop. The USA is also readily able to supply enough cannabis, to satiate the coming demand increases. Supporting industries will be booming, much the same as they already are in the legal states.
But Wait... There's Also Hemp!
There's also an entire cornucopia of industries to take advantage of the hemp industry. Hempcrete is going to be huge, just talk to any former concrete worker using hempcrete. Hemp seed is food, hemp oil is a direct replacement for diesel fuel, just filter it well.
Any predictions?
Canada will take a big hit when growing hemp becomes legal. That's where most hemp in US comes from. Pretty stupid that it's illegal to grow. It's just another abuse of lobbying that we should be embarrassed about.
You're right on the money there!
The good thing is, a lot of new ways (and old ways) to use hemp will be found. There are already thousands, yet we have 70 years of almost zero movement in most countries. Canada and other countries are way ahead of the usa in outdoor cultivation equipment.
Lots of changes coming :D