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Originally Posted by lewdog
Definitely time to look at different sector plays with dementia in office vs the past 4 years of cognitive dissonance in office.
Their is plenty of risk in two main areas that many are looking at, EV and pot. Both have too many companies vying for the same technology and space. Many of these smaller companies get bought out. That sounds great if you own the company doing the buying but that's not always the case. The debt laid out in acquiring these companies, especially in pot, comes with needing years of a successful business model to draw down that debt and turn a profitable business. I've owned CGC for years and they're a major player but with major troubles turning successful profit and paying down debt. You'd think legalizing weed would make their business boom but that's not always the case.
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Yeah, it's tough to achieve economies of scale (with positive marginal profits) with a manufacturing process that is reliant on hand labor. Sure you can make incremental gains through seed supply, logistics, packaging, access to customers and best practices, but the rest of the ag industry did it through mechanization, and that doesn't appear to be in the cards for pot. Size doesn't necessarily equal improved margins without substantive production efficiencies.
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Originally Posted by ghak99
Most people don't understand what happens when a niche product becomes an actual commodity. There is always a boom worth quickly mining, but then it's followed by a substantial shift to commodity margins as something like weed moves from medicinal to legal.
Just be glad actual farmers aren't growing the shit. It, and everything attached to it, would already be near break even margins and it'd become a near worthless investment overnight.
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Yeah, some guys are trying to get CBD operations up and going, but even at the miniscule acres that were applied, dudes are having trouble with huge wait times for payment, meaning they flooded the market.
I am wholly uninterested in anything manual labor. I can't find anybody to even do some basic labor and tractoring. Much less walk fields and do manual labor. Much less put together a crew to do anything at scale.
Especially in my part of the world, achieving a consistent product would be paramount. With the ridiculously harsh conditions we can encounter, it's going to have to work a lot of years before I'd put any real assets towards it.