grimkhor t1_jeeh79m wrote
> The senior tier will be “very heavily dominated” by cannabis companies
I'm out.
Fuego1050 OP t1_jeejiyt wrote
Lol - most hated sector in the world right now. 2 year straight drawdown on MSOS etf.
Despite revenues growing 30-40%, and top four with ≈50% gross margin, ≈35% ebita margin. And >1bil in revenues. Trading 1x rev.
Stocks have been systematically fucked by custody being withdrawn bc federally illegal - pershing, euroclear, +++ have forced retail to sell stock.
But shoots are emerging - that this will reverse - with re-scheduling cannabis by HHS on the horizon. This CSE news is a small positive step
grimkhor t1_jeekfkr wrote
You do you. You're obviously very heavily invested in it anyway. Sentiment only works for markets as a whole. Lots of hated sectors don't exist anymore or didn't make profits for decades. There's no way a commodity product is in any way premium that it can sustain such high margins. Either it doesn't expand the market enough or the margins will shrink. At the end of the day for me it's not different than farming any other product.
This post is also a bit misleading as it could easily be "Companies get listed on an exchange that got kicked out of the real one". Still good luck to you.
Fuego1050 OP t1_jeelk8f wrote
Moats around state licenses create barriers to entry. Medical only programs have larger barriers.
Definitely a commodity on low quality bud, but mid/premium flower is more CPG like with pricing power.
Flood of capital and excitement bc of how strong demand is creates supply surplus - but this capital constrained environment is weeding out the unprofitable fat.
Like alcohol - 4-5 will survive and dominate - and this is a long term growth giant that alcohol/tobacco and pharma want a piece of.
Lets come back to this after re-schedule happens at some point this yr.
grimkhor t1_jeem8ap wrote
Looks to me the best to hope for is becoming something like tobacco companies that get carried a lot by brand names. Nobody knows what the addressable market is for premium which in the end will probably be the biggest factor. Good luck with that it's just not for me.
Fuego1050 OP t1_jeeu6rb wrote
👍🏽 not for a lot of people - most blindly dismissing sector bc of how poor the equities have performed - but there is a real opportunity there as an emerging market over-taking a multi billion dollar illicit one.
Systematic elimination of custody has created absolute bargain barrel prices - but no one cares until the catalyst comes.
grimkhor t1_jeeuri1 wrote
Sectors are dismissed all the time. Are you invested in every sector out there? If not you dismissed sectors. If you see something which I don't doesn't make it good or bad. You make investments according to your conviction and I make them according to mine which is good.
Fuego1050 OP t1_jeeyfrd wrote
Ohhh of course - agreed with the point.
I was just trying to make the point that there is so much hate/negativity on the sector bc of political/extraneous factors - that when resolved may make it very attractive. Just pointing out the opportunity I see. Not that anyone should take it.
grimkhor t1_jeeyux9 wrote
I can understand the attractiveness of the sector even if I ultimately view it differently. Good luck with the investment.
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