Cannabis - opinions

masonic

Computer_Beginner wrote: »

Thank you for a sensible reply.
I take your point about low barriers to entry. But is that not the case with many goods (eg fruit, meat etc)? Many of us could keep our own chickens and grow our own tomatoes - but the economy of scale means most of us purchase from retailers.

I agree about politicians using their own powers to influence and maniulate markets. It's similar to insider trading really. I won't make any more comments...

Yes, the trouble is the types of company that will ultimately capture that part of the market don't exist yet in the UK, and seem to be cottage industries in the US. It's not something you can currently invest in through the usual mechanisms.

At the moment there are two types of cannabis products - highly refined and expensive prescription products for specific medical indications, and dispensary-type unrefined products (illegal here and not really mass produced elsewhere).

There's also 'hemp oil' which contains very low levels of THC and is legal in the UK, but this seems to be overpriced snake oil and not much different to the sort of thing you find in the specialist vegetable oils section of the supermarket.

dividendhero

UK is by nature a very authoritarian country, eg it still has the strictest censorship in the Western World. Think it'll be a long time before Wacky Backy is legalised in Britain..Still I can see UK exporting it to other countries, but can't see that being a particularly sustainable business as I don't see the UK having any competitive advantage over say Canada or Holland

atush

qwert_yuiop wrote: »

If production ever becomes legal, the market will likely be flooded within a matter of a few months as the first harvest becomes available. It's actually not very difficult to produce - a bit like nettles, a similar plant. The only important aspect is to remove the male plants to prevent pollination of the female flowers. Given some inexpert farmers in the locality, rogue males will be filling the air with pollen, ruining everyone else's sinsemilla.
I'd say overall, the business is one to avoid. I'm told the only reason for any floor in the price in the US states where it's been legalized is smuggling to high price states where it remains illegal, hedonistic Nevada to puritanical Utah being one such trade.

I think if it is regualtd and taxed, there will be quite a bit more setup thatn that- at least for retail sales. the grow your own for personal use is another thing entirely.

atush

Computer_Beginner wrote: »

Do you mean if legalisation spreads from Canada / USA to the UK / Europe?

My point is that by the time that happens, you may miss the bull market?

Perhaps, but not for uk companies/farms

given the problems with fed law in the USA, and not being able to use bank acccts- only cash is limiting the business there. Wouldnt be a problem here.

msallen

I imagine that once its legalised the tobacco companies will be all over it. As I understand it the only reason they're still holding back in USA is because its still illegal at the federal level, and that makes it a legal minefield there at present.

My nephew (who is American) worked on a cannabis farm farm out on the West coast for a year or so and from what I gather it was a family business employing a couple of dozen people across two farms, so certainly not the type of business to issues shares.

I'm not really au fait with US law but I know he had some issues coming from a state where it wasn't legal (at the time) but earning money from it in one where it was, so he used to have to get paid in cash and then every time he went home to the east coast he would deposit $9500 (under the $10K reporting limit) into his account.

Computer_Beginner

qwert_yuiop wrote: »

If production ever becomes legal, the market will likely be flooded within a matter of a few months as the first harvest becomes available. It's actually not very difficult to produce - a bit like nettles, a similar plant. The only important aspect is to remove the male plants to prevent pollination of the female flowers. Given some inexpert farmers in the locality, rogue males will be filling the air with pollen, ruining everyone else's sinsemilla.
I'd say overall, the business is one to avoid. I'm told the only reason for any floor in the price in the US states where it's been legalized is smuggling to high price states where it remains illegal, hedonistic Nevada to puritanical Utah being one such trade.

That's an interesting perspective.
So how is it different for tobacco? Is it due to tobacco being grown overseas, where labour is cheaper? Are labour costs even that significant, with machines and automation etc?

Computer_Beginner

msallen wrote: »

I imagine that once its legalised the tobacco companies will be all over it. As I understand it the only reason they're still holding back in USA is because its still illegal at the federal level, and that makes it a legal minefield there at present.

My nephew (who is American) worked on a cannabis farm farm out on the West coast for a year or so and from what I gather it was a family business employing a couple of dozen people across two farms, so certainly not the type of business to issues shares.

I'm not really au fait with US law but I know he had some issues coming from a state where it wasn't legal (at the time) but earning money from it in one where it was, so he used to have to get paid in cash and then every time he went home to the east coast he would deposit $9500 (under the $10K reporting limit) into his account.

Presumably these issues with ''federal law'' don't exist in Canada?

Computer_Beginner

dividendhero wrote: »

UK is by nature a very authoritarian country, eg it still has the strictest censorship in the Western World. Think it'll be a long time before Wacky Backy is legalised in Britain..Still I can see UK exporting it to other countries, but can't see that being a particularly sustainable business as I don't see the UK having any competitive advantage over say Canada or Holland

I agree.
The UK doesn't export tobacco or potatoes etc, so I don't see how the logistics and economics would be different for cannabis...

Computer_Beginner

masonic wrote: »

The way to invest would be to buy shares in companies involved in the production of medical marijuana products, which in the UK would be companies such as GW Pharmaceuticals.

.

What would be your opinion on the HMMJ ETF?
GW Pharm is one of their 39 holdings (the only UK holding).

Like many ETFs, it seems to be limited regarding how many 'retail' fund platforms offer it - maybe due to the KIID restrictions?

At about 0.75pc, it seems a bit expensive.

I'm guessing as a UK investor, if you can't buy the ETF, you'd need to buy the underlying holdings?

qwert_yuiop

Computer_Beginner wrote: »

I agree.
The UK doesn't export tobacco or potatoes etc, so I don't see how the logistics and economics would be different for cannabis...

We have a fairly significant potato export trade.
Also, what makes you think we've an authoritarian system?
Any bans on any form of clothing here? (France, Denmark) Education in any language but the national one? (France) Imprisoning secessionists?(Spain)
We could go on.