The Collapse of Pot Stocks: Refreshingly, Not COVID-19’s Fault

Hard to feel sorry for victims of these hilariously obvious pump-and-dump schemes, but they sure got their pockets cleaned out.

By Wolf Richter for WOLF STREET.

There are plenty of questions surrounding cannabis – including whether or not it should be legal, and how it should be regulated and taxed. But there is no question surrounding “cannabis stocks”: They’re phenomenal pump-and-dump operations. And now is the dump-phase.

These are companies with barely any sales, generating huge losses. They were hyped endlessly by vocal promoters and by Wall Street which got rich off the IPO fees. The media oohed and aahed over the meteoric rise of their stocks and their market capitalization which skyrocketed into the many billions of dollars.

For example, Tilray [TLRY], which went public in July 2018, at $17 a share, skyrocketed to $300 a share, and its market cap hit $29 billion, by September 2018. That was the “pump” part of the pump-and-dump. Then the “dump” part commenced. Now the shares have collapsed by 97% to $7.84 and its market cap is down to $815 million.

Tilray has lost money every year of its existence, including $321 million in 2019, on $167 million in revenues. Yeah, these companies are trying to sell an agricultural product, and their net losses are double of what their revenues are. This takes some doing, folks.

Company after company did the same thing: Pump and dump to the max. And they did this in an environment where the products are still not legal in their largest market under US federal law, and where the long established and well-functioning black market is competing ferociously because it doesn’t have to follow rules and pay taxes, and where there are no barriers to entry, and where a surge of farming of cannabis created rampant supply that then caused prices to collapse.

To illustrate the overwhelming beauty of these pump-and-dump stocks on the dump-side of the deal, I have taken the 10 biggest pot stocks and divided them into two charts, with five stocks each, so that the colorful spaghetti doesn’t get too dense. These charts show the collapse in percentage terms from about a year ago. Note that a 100% collapse would mean the shares are worth zero. And that moment is coming up.

Here is the first group of five. The illustrious performance of this group of stocks ranges from -69% to -94% over the past 12 months (percent change data via YCHARTS):

  • Aphria [APHA]: -69
  • Aurora Cannabis [ACB]: -89%
  • Cronos Group [CRON]: -71%
  • MedMen [MMEN]: -94%
  • Tilray [TLRY]: -88%

And here is the second group of five pot stocks whose illustrious performance since May 2019 ranges from -48% to -86% (percent change data via YCHARTS):

  • GW Pharma [GWPH]: -48
  • Canopy Growth [WEED.TO]: -68%
  • MediPharm [LABS.TO]: -70%
  • OrganiGram [OGI.TO]: -74%
  • HEXO [HEXO]: -86%

When you look at this stuff, it’s hard to even feel sorry for the victims – the folks on the dump-part of the deal – whose pockets got cleaned out. I mean, I’m trying to feel sorry for them, but it’s just hard. They suckered themselves into it via their powerful motivation to get rich quick on some obvious pump-and-dump scheme, and this motivation makes those schemes possible. Participants fall into consensual hallucination, and they surrender their money to the scheme, and then some or nearly all of their money is gone.

The winners are those on the pump-side of the deal who then dumped their shares and got out in time. Kudos to them. They taught those folks a lesson about the price of consensual hallucination, and those folks paid their tuition, and hopefully the cost wasn’t devastating, but big enough so they’ll never forget, and so that next time, instead of falling for all the hype, they’ll think and look at financials before they buy this crap.

And this wealth transfer – that’s really all it was – predates the new coronavirus and for once, refreshingly, has nothing to do with the coronavirus or the sell-off in the markets or the collapse of the price of oil. It’s just purely and simply one more scheme in an endless series that blew up.

Shares of shale oil drillers collapsed by 25%-50% on Monday. Their bonds got massacred. Saudi-Russia price-war strategy appears successful in wiping out investors in the US shale-oil sector. Read...  The Great American Shale-Oil Bust Turns into Massacre

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  136 comments for “The Collapse of Pot Stocks: Refreshingly, Not COVID-19’s Fault

  1. Emperor's New Swag says:

    As the tide slowly goes out to sea, the same insiders who pumped and dumped these stocks will have already boarded their mega-yacht to watch the rest of the Ponzi Tech and BioTech companies begin to get exposed. All these companies have also lossed money every year of their existence. Who wants to share a lyft home from their co-working space to go home into a co-living apartment right now? The Sharing economy foundation is cracking….

    • I’ve got a nice collection of domains I can “share” with anyone who can put together a nice pump-n-dump scheme!,, HerbinPlanning and some others. Is it too late to be unscrupulously rich?

  2. No Expert says:

    The Tesla’s of the world help people suspend disbelief, they see TSLA break all the rules (no profit, huge market cap) and suddenly magical thinking is in back in fashion again…

    • Happy1 says:

      All these money losing companies of all kinds exist only because of the largesse of the Fed and sub inflation interest rates.

      • rhodium says:

        So it’s entirely rational to invest in money losing companies as long as the fed keeps interest rates low? You said “only”. I would argue at some point in the future I can lose money a whole lot slower by not investing in money losing companies even if interest rates are 0. This is bubble psychology… Sure the fed didn’t help, but bubbles have preceded the fed. Try investing in reducing your cost of living if there’s nothing else worthwhile.

    • roddy6667 says:

      Magical thinking is easy when you are stoned.

      • DR DOOM says:

        If this comment ends up as filter fodder so be it: The moon is high, so am I The stars are out , and so will I be In a lttle while. The dude that stuck this in my head in Zweibrucken Germany decades ago owes me a $100.

      • polecat says:

        You mean dumb like like rock, right?

    • The pot industry took an off road trip into medicinals, but in a recession/depression your customers want the THC (pay attn to what Musk smokes, not what he sells) . They decriminalized magic mushrooms. The industries consolidate, in a few years you will buying all you want online and using bitcoin.

      • The Colorado Kid says:

        I dunno Ambrose, seems like my Bitcoin is acting more like a Gold Mining Stock than the my Gold Bullion. Maybe Peter Schiff was right.
        I guess we’ll see.

  3. Alberta says:

    It’s all going to pot
    whether you like it or not
    The worlds gone to hell
    As fur as I can tell

    And I’m sure gonna miss it a lot

    Thx Willie xoxo

    • Harvey Mushman says:

      “The worlds gone to hell”

      What you meant to say is…

      “The worlds gone to heck”.

      Don’t let this happen again!!!

  4. David Calder says:

    I don’t use any drugs in any form including coffee but I did grow cannabis for about 5 years supplying the medical dispensaries in WA State, before legalization basically shut most of them down, and I did it for free.. One variety I grew was called, “Therapy” (Charlotte’s Web in other places) which had no THC used for children with epileptic seizures. Of all of the legal states WA is unique in there are no legal homegrows except for those with a medical card.
    WA State licenses were allotted by a lottery but a surprising number drawn were activist legal experts who had submitted their own name who soon discovered they hadn’t won a money printing machine because most folks were still getting their cannabis from medical dispensaries. That soon changed when these lawyers managed to get most all of the MMJ dispensaries closed forcing patients to flock to their now thriving shops. The State was complicit because there are no taxes on medicine. Single shops somehow managed to bloom into chains and not long afterward stocks were sold to the gullible.
    I have hated these parasites with a passion so feel no pity except for those who really thought they were on the ground floor and put hard earned money into what was always a scam.
    It looks like WA State could change their homegrows laws in 2020 but it will be a cold day in hell before I stop believing we’ve all been scammed making some very rich.

    • otishertz says:

      The cannabis regulatory system in WA was the brainfart of Mark Klieman from the Rand Corporation. It is a ridiculous system meant to ensure retail conglomerations have the upper handover the producers.

      • joe saba says:

        still say better to
        at least you know 100% goes back into economy
        and keeps it out of corrupt greedy politicians

      • Tonymike says:

        He died last year. Don’t believe in karma but he died. Also, if he was a big shot in Criminal Justice policy as it was denoted, that has been a big failure as well. We still house and incarcerate the most people in the world, in the land of the free.

    • Harrold says:

      Liquor sales were handled they exact same way.

    • polecat says:

      Yes … and in typical hysteric fashion, the chief popos & so-callex ‘Drug Warriors’ are once again coming out of their entilted woodwork, to proclaim “what about the chilluns!!” at the top of their lungs.

      They Never cease to latch onto a non-crisis to be, uh, ‘un-wasted’.

      They’re afraid of losing ever moar of their power & grift !

    • Javert Chip says:

      Dave Calder

      I’m an old geezer who hasn’t smoked in 55 years since pot was strictly counter-cultural. My view of the pot market:

      1) pot smoking is really only cool if it’s totally illegal; making it legal reduces market demand by some huge %age and the whole experience becomes somewhat like having a smelly Ambien.
      2) Yup, there is on-going demand for “legal” pot, but then some people drink hand-sanitizer
      3) Smoking pot is a pain in the ass (unless it’s illegal; did I mention that?) – everything it touches smells like secret teenage crap

      I suspect every high-school dropout in America has already moved to a “legal” state to make their fortune growing pot. How hard can it be? The supply is/will vastly exceed demand.

      98.6% of the mystic was buying and smoking the miserable stuff (I much preferred brownies) for a buzz, especially if it was illegal. I’m sure somebody’s made money off this stuff, but the term “investor” doesn’t readily come to mind

  5. Robert J Kranz says:

    Wolf, I haven’t commented for a while, too many comments to read.
    I’m glad you brought the pot stocks into the absurd world of loser dream
    While it is an industry that is viable, they are many fails in the process like the auto industry over a hundred years ago.
    It will be a very large business early in this decade after over eight decades of prohibition,…in only took alcohol 13 years to reverse!!

    • Wolf Richter says:

      Robert J Kranz,

      When pot becomes legal in the US under federal law, some farmer is going to plant 1,000 acres of it, other farmers will too, and they’ll harvests it with a special Deere combine. It will be traded in the futures market and priced by the bushel. The retail price will drop to the level of other ag products, such as soy beans. And all those pot stocks will long be zero. And don’t think of it as unlimited demand. People who smoke pot have been smoking pot all along because it has been easy to get. And people who don’t smoke pot, won’t smoke pot.

      • VeryAmused says:

        Or, if you have good sun exposure, a little patience, and know how to stop the pests, preferably organically, you can easily grow more than you can use in a year for the price of a decent night out.

        cough…I am not speaking from experience of course…cough.

        • Implicit says:


        • Frasersgrove says:

          Couldn’t agree more, there are already kits you can buy that make growing very good pot easy, even for brown thumbs…

        • Paul says:

          The big joke in Canada where it was legalized was that one could get better weed and cheaper from the local dealer. Then the legal stores which there were few could not get supplies and the online stores were out of stock most of the time and there was little variety. So for those medicinal user with a permit it was better to grow it at home unless your landlord would not allow it.
          Then few realize that consuming interferes with ones circadian rhythm.

        • Yup. Imagine tomatoes had just been legalized. Suddenly people will pay ANYTHING for a tomatoe? Or… just grow some.

          Okay, so these tomatoes do get you high, but still.

      • FromKS says:

        There will be some large scale grow operations, but the market will be similar to beer. Some people will want nice craft beers (and willing to pay a premium for that). Others will be quite happy with Bud Light (pun intended).

        • MC01 says:

          Most of the legal opium supply in the world is grown in India by smallholders in designated areas (mostly in Rajastan, Madya Pradesh and Uttar Pradesh): the license to grow poppies is free for them as long as they harvest at least 4.5kg of opium paste on a 1/10 hectare parcel per year.
          Just wait until India does the same with pot: no need for greenhouses or other capital intensive equipment, cheap labor and dealers accustomed at exporting controlled substances with with well established contacts all over the world.

          You don’t like what this farmer grows? Just try the pot grown by another family! It’s kinda like the same thing with masala spice mixes: each family has its own recipe.

      • BaritoneWoman says:

        Don’t know about pot (cannabis), but I believe its cousin Hemp will one day be traded in the futures markets under the category Foods/Fiber (like cotton) Hemp is to cannabis what silver is to gold; not as glamorous, but has more practical/industrial uses.

        • Stephen says:

          This is already being done; there are several exchanges. Panxchange is probably the most sophisticated at the moment.

        • Michael Fiorillo says:

          Yes, why should a single tree be cut down, when the needs of paper industry could seemingly be supplied with hemp, instead of wood pulp?

      • The Colorado Kid says:

        Or it will be similar to a combination of Tobacco & Alcohol and generate a lot of much needed tax revenue in a time where tax receipts are going to be in dire need.
        I predict the big players like MO to take over the current sh*tshow when cannabis is finally legal on the federal level.

      • Good subject, TV interviewed a group of Iowa farmers; old, white, female, who sharecrop their land over to men. Most of them couldn’t bend over to pull a weed. They are worried about ‘sustainability’, but maybe not before income. There is a serious discussion here, about farmers not growing the food America eats, i.e. GMO feedstock. GMO means your Quaker Oaks have glyophosate. I doubt their operations could grow pot according to the standard consumers expect. Midwest farmers could grow product to be processed into THC products for mass consumption, but agribusiness and pot are not converging on Wall St. The Midwest seems to be on a similar path as it was in the 30’s, in unsustainable agriculture, combined with political obliqueness, suggests another financial and climate event.

        • Wolf Richter says:

          Ambrose Bierce,

          US farmers are smart and tech savvy (drones equipped with sensors and cameras, high-tech and now even self-driving combines, computerized irrigation, etc.) and can grow just about anything for which there is a market (well, OK, some tropical fruit won’t grow in the US). If the crop appears very profitable, they’ll pile into it massively and produce it until prices crash. They can grow specialty products and commodities. Organically grown crops are a big thing because they fetch more money. Some of the best wines in the world come from the US. The produce from the Central Valley — covering the wants and needs of just about all ethnic groups in the world — is superb.

          Don’t ever underestimate US farmers. And forget the old women you saw on TV :-]

      • Cas127 says:


        Not really pot specific, but there probably is a good future post in the philosophical argument between requiring/not requiring profitability pre-IPO, as a criteria for invt.

        On the one hand, IPOs are almost definitionally intended to be speculative, start-up, scale-up type capital for new, largely untested, potentially disruptive technology/products.

        On the other hand, many unicorns have stayed private so long, with so much funding, *and such a long track record of losses*…that they almost cease to be speculative…they have *proven* that they can’t get the base economics to work.

        Why think that public capital will change that?

        Bail out failed insiders maybe…but turn the ship around after so many a season? Why believe *that*?

        The really interesting part to me is how excessively engorged unicorns have managed to mismanage technologies that actually could/should be profitable on a transactional level, by insanely ramping up administrative overhead at a pace that almost precludes profit-cultivating course correction.

        It is like they sprint to embrace their destruction.

        At least the technologies, if not the companies, survive.

        • Javert Chip says:

          Speaking of unicorns, is there a person on the planet that REALLY believes WeWork, BeyondMeat, Uber, Lyft, DoorDash, Smile Direct Club, Peleton, and that goofy mattress company were actually TECHNOLOGY companies?

          This is what happens when the shallow end of the gene pool is allowed to invest. Then the same crowd wanders around sobbing about how Wall St is out to get them.

          Sincere advice to (most, but not all) investors in blatantly non-tech start-ups:

          If you’re invited to a sheep sheering contest and you can’t find the sheep, YOU’RE THE SHEEP.

        • Cas127 says:


          I am marginally more generous in terms of calling them technology companies…I think calling them “applied technology” companies is passably fair.

          On the other hand, until the base/transaction level economics work (ensuring at least the hope of profitability) then it is almost hard to say you have a “company” – rather than a VC subsidized experiment that loses money on every transaction and “plans” to make it up by volume…

          The fundamental pathology seems to be that insanely fast scaling up means *everything* – presumably because that “indisputably” means that you will be able to semi-magically lock out competitors…and somehow fix the transaction level economics later (hundreds of millions in losses later).

  6. DR DOOM says:

    The market will finally return to a dude named Dave in a van.

  7. Thomas Roberts says:

    Idk, something about weed make you high and then the stock prices high, maybe it’s connected.

    • Cas127 says:

      So maybe in addition to Helicopter Ben Bernanke, we need Doobie Ben?

      I would say that ZIRP driven valuations do provide evidence of drug use.

      And, more seriously, I don’t think it a coincidence that the G loosens up on drug use during the same era that it has failed to provide a better material life for future generations.

      A more stoned populace is a less restive one.

      • Thomas Roberts says:

        I think the stereotype for drug use for wall street is cocaine, if that becomes legal. I couldn’t even imagine how high the stock prices would go.

  8. Pilgrim says:

    I just don’t understand why fed govt is against this plant. I’ve heard many stories of cancer cures from it. As for abuse, then why not prohibit alcohol, smoking, etc? Anything can be abused. Maybe it’s big pharma trying to stop it. If we learned all the properties of the many plants and trees for healing, that would spell the end of big pharma I think.

    • Harvey Mushman says:

      I have smoked pot maybe 15 times total in my 57 years. I preferred Beer much more and still do.
      However, even as a 17 year old, it was clear to me that alcohol was wayyyy more dangerous that pot.

      • Michael Gorback says:

        I agree with Harvey. In terms of both health and behavior alcohol is much worse.

        Stoned people don’t start bar fights or beat their wives.

        I went to college in the early 70s. I am familiar with quite a few substances on a personal basis. I’m also a physician with over 40 years in practice. As a pain specialist prescribing narcotics and as someone who has worked with law enforcement and the medical board on pill mill cases I’m very familiar with substance abuse from several points of view.

        Alcohol is by far the worse of the two evils.

        I also grow hydroponic vegetables. It’s hard to distill your own alcohol but if you can grow lettuce you can grow your own pot, and hydroponic lettuce practicality grows itself. Actually a lot of what I learned about hydroponics was reading tips and tricks on marijuana growing sites. These guys are incredibly sophisticated and let’s face it – marijuana is a weed. It will grow anywhere.

        As I mentioned in another response here you can just grind the flowers, bake them in the oven, extract with alcohol and make a homegrown batch of stuff that only requires a few drops on the tongue.

        The marijuana industry doesn’t have much of a moat.

        • otishertz says:

          All true, but there are huge differences between growing hydroponic lettuce and hydroponic cannabis.

        • nick kelly says:

          I know a LOT of people who are or have been employed by pot shops, some of them actually called ‘Hydroponic’ or the ‘No Dirt People’. (This is the indoor under lights)

          Whatever they sold to customers, they personally all grew or grow in pots with soil-less mix with their choice of nutrients but none with flood tables etc. Yes you can squeeze out a bit more product with hydro but everything has to go right.

          I have known guys who got great results with hydro, and this topic has as many opinions as what car you like, but the dozen or so people I’ve known who sold the rock wool slabs, pumps, timers etc. used more basic methods themselves.

        • Paul says:

          A writer from the Globe&Mail tried to grow weed from an expensive specialized grow kit I think it was around $2000. It was a failure and the product was of no value. Home medicinal growers do not seem to have such problems. The indoor green houses where they are grown commercially are very easy to get contaminated and then the whole crop must be scrapped.
          It grows best outdoors in central and south America. Your results will vary in other areas.
          I grow many types of unusual outdoor hardy plants as a hobby.

    • Deanna Johnston Clark says:

      If it were legal think of the money lost to the prison complex and big pharma…just the prison guard union alone would stop it.

      • Harrold says:

        Think of how many times police have stopped a car or raided a house because ‘the smelled pot’.

        • Ed C says:

          When the cops couldn’t get the gangster on anything else they busted him for possession. And people wonder why police are hated and feared.

    • KFritz says:

      If you want the main villain, it was Henry Anslinger, first director of the Federal Bureau of Narcotics. Look up the history. He was also a spectacular hypocrite–hyperbole absolutely appropriate. His other qualities aside, Senator Joe McCarthy was an injection opiate addict. Asnlinger supplied McCarty with medicinal morphine while his bureau and the laws and policies he inspired were putting cannabis users in jail. It’s his legacy we “enjoy.”

      • Michael Fiorillo says:

        Yes, and like his rival and fellow monster, J. Edgar Hoover, Anslinger was also a bigot, using the narcotics laws as racial and cultural weapons.

    • DR DOOM says:

      Dopers stay at home , eat Hot Pockets,pizza , Doritos and drink Mountain Dew. They play video games or listen to music and “mess with the head” of their buddy dopers . The last thing dopers want to do is drive a car, which is usually the first thing that happens when a half gallon of Ol’Head Buster 90 gets involved.

  9. California Bob says:

    “Puff and Dump.”

  10. RoundAbout says:

    I find it ironic how politicians rail against tobacco but then promote pot. The big panacea of new government taxes going down the pot. Tobacco is more addictive but the lungs will be nice and trashed for COVID-19 in either case.

    • otishertz says:

      Tobacco could never pass the purity standards required of recreational marijuana. I know because I ran some cigarettes through a marijuana testing lab. They failed.

      In Oregon there is a huge list of banned pesticides and very strict lab standards. There are no such restrictions nor continual small batch testing on tobacco as with cannabis.

    • nick kelly says:

      There aren’t too many pack- a- day pot smokers.
      BTW: apart from particulates from combustion of anything. nicotine IS a poison. You can use it as an insecticide. A non-smoker who harvests it can get skin cancer.

      • Deanna Johnston Clark says:

        I harvested cigarette tobacco in North Carolina back in 1973….the full season from the big leaves at the bottom to the topping weeks later.
        The share croppers and teenagers working were warm, kind people and I’ll never forget them. Never heard of any skin cancer.

        We had the gummy gum sticking to our arms and had to seriously clean with brushes every day…the worms were everywhere!!
        I’m glad now to have had many jobs like that because the more experience you have with off screen real life, the better!!

    • sc7 says:

      Cannabis can be consumed in edibles, tinctures or dry herb vaped, all of which have zero or next to zero impact to the lungs.

      • Ed C says:

        I have a medical marijuana card. I’ve found that an indica gummy chopped into 2.5 mg bits helps me fall asleep. I used to take prescription sedative lorazepam but my doctor refused to renew the prescription — it is now a ‘controlled substance’ that could jeopardize his license. I also indulge in a joint now and then. Moose and Lobsta (sic) is my favorite. Just a few puffs is sufficient. I doubt that I spend more than $30 a month on cannabis. I think I spend more on my MM card renewal than I do on product but it is good to be ‘legal’ and not fearful of being busted. BTW alcohol almost killed me when I got drunk and barfed in my sleep. That was back in college. I’ve never been drunk since. I also never drive under the influence of pot or alcohol.

  11. 2banana says:

    Innovative Industrial Properties, a REIT for marijuana greenhouses/warehouses has been holding pretty well and pays a decent dividend.

    There is no where near the amount of revenue and profit in the marijuana industry to sustain all these companies, let alone pay all the optimistic tax revenues states were counting on to help balance their insane spending levels.

    Additionally, the massive taxes and regulations that states have heaped upon the new legal marijuana industry has guaranteed a very robust and competitive black market.

  12. Michael Gorback says:

    @Roundabout: You’ve never heard of pot being baked into brownies? You don’t have to smoke it. Oral forms are widely available.

    The only time heat needs to be applied is to convert the marijuana into an active form (decarboxylation to active THC). Bake it into cookies or heat it in the oven (225 degrees for 45 minutes) and do a simple extraction with a strainer and high potency alcohol (everclear) to make a tincture.

    Smoking is popular because burning the pot immediately dexarboxylates it and inhalation absorbs the drug much faster than ingestion. In general, the high produced by a drug depends on how fast the drug level rises in brain cells. Inhaled burnt marijuana increases brain concentrations much faster than GI absorption because higher blood levels are achieved.

    This is also why heroin is preferable to morphine and xanax is preferable to valium for those who abuse the drugs. Heroin and xanax penetrate into brain cells faster than their counterparts.

    • Wolf Richter says:

      This is what I love about the comments. You get all these great detailed tips from experts with lots of experience who actually inhaled :-]

      • Iamafan says:

        Well some here are old enough to be ex or stll hippies from the Woodstock generation.
        I actually went to grad school passing Max’s farm on the way home. And it wasn’t just pot. I love my whisky collection nowadays.

        • Lisa_Hooker says:

          Yup. Then I became just a bit older and discovered armagnac and calvados.

      • polecat says:

        Betty Crocker blueberry mix was my choice of ‘edible’ back in the day .. a quick sizzle of X portion of mj in a frying pan with a bit of olive oil.. to be added to the mix, then baked, cooled, and consumed .. within reasonable limits, of course ..

        presto! changeo! ‘;]

      • Cas127 says:


        True…but at the end of the day, I think I would like to learn more about how to build an affordable home than the chemical advantages of heroin.

    • otishertz says:

      Fresh juiced cannabis, which is very healthful, cannot and will not get you high. It would have to be decarboxylated in a double boiler for about 45 minutes first.

      Deer will eat it. Have you ever seen a stoned deer? The reason is deer don’t cook.

      • Paulo says:

        My son the electrician built a grow-op one day. 7-8 years ago? All hydro. At the time you just went in to a local hydro store and bought clones from a pretty hot hydro lady who made a good living doing it despite it being illegal. (ah, the times….BC bud was famous). Anyway, this Dad was pissed off about it, except for the wind up and shut down part of the operation. He sold his last batch and had a whole bunch of “product” left over. He decided to make an olive oil infusion for all his friends for a Christmas present. So (to make a long story short), that fall he ‘marinated olive oil and pot buds’, for a few weeks….. I believe. He strained it all out and had a couple gallons of sludge buds left over which he thought was a good idea to put out in the weekly garbage collection.

        So did the black bear who got into it. All I saw were the teeth marks in the can and the tracks heading off in the bush.

        Speaking of which, maybe it was the same bear I discovered with his head stuck in the deep fryer pot one day. Same son bought a propane fired deep fryer and all his ‘buds’ would come over for beer, wings, and green buds. They cooked outside and just let everything cool overnight. One morning I popped over and saw a bear running away with the deep fryer pot on his head. It came off and he went back for it! I had to chase it away with my truck!!!

        It was a phase….son no longer smokes pot or grows it, but everyone else does around here!! We have more bears than ever!

      • Phil says:

        I ate about a 16th of an ounce of raw cannabis on a visit to Amsterdam years ago, and it was the highest I’ve ever been. I was incapacitated with laughter and paranoia on a hotel bed for about 3 hours. Since then I’ve continued that habit on and off for decades, always with clear psychoactive results. So there is a gaping hole in the claim that eating raw cannabis doesn’t have psychoactive effects. At one point I found a good explanation of how digestion metabolizes the chemicals in raw cannabis and explained why it does in fact lead to a strong psychoactive effect, but I can’t find it due to the search engine spam of numerous “raw bud can’t get you high” essays by people who have obviously never tried it.

        • otishertz says:

          Was it live or dried? Live cannabis will not get you high.

          Dried cannabis can, depending on the temperature it was dried and for how long. You can decarb cannabis at 90 degrees if you wait long enough. Also, THC degrades into CBN which is a sedative.

  13. WES says:

    I still can’t figure out how legalized pot can compete with black market pot.

    The tax rates guarantee the black markets a high fixed profit margins!

    Isn’t this price rigging at its finest?

    Where can I buy black market pot bonds?

    • roddy6667 says:

      You can lend a dealer $10,000 to buy a few kilos of weed and split the profit. That’s how it was done in 1968. A friend told me about this. :)

      • insanity says:

        Last spring driving up the coast from Calif, virtually every town had a sign that said “Pot $50 a pound”, heck we paid $10/oz for stems&seeds in a glad-bag called a ‘lid’ a 4-finger can as kids in 1970’s, now you can get pure bud for $50/LB

        The market is saturated, they’re giving it away below cost.

        I will say this, most of the cheap pot you see is most likely has fungus which can make you really sick, that’s why its cheap, and if its not medical there is nothing to keep them from selling it; ( Some of the fungus on pot is natural, but can kill, and destroy your lungs permanently ). Growers are supposed to trash pot with fungus, but of course they don’t, and if you don’t have the humidity just right and temp in an indoor grow-room, you get fungus 100%.

        That’s why most people grow, or if you do buy, buy medical which is subject to basic laws.

    • Lisa_Hooker says:

      I have heard that just about everyone that smokes weed still purchases from the the same reliable suppliers they have used for the past 10 or 20 years. I, of course, have no experience with that sort of thing whatsoever. None at all, none, nada. Really.

    • MC01 says:

      In Copperhead Road.

      • Morty Mc Mort says:

        Maybe “Hopper Head Road”???

      • Dan Romig says:

        I done two tours of duty in Vietnam
        I came home with a brand new plan
        I take some seed from Columbia and Mexico
        I just plant it up the holler down Copperhead Road
        And now the D.E.A’s got a chopper in the air
        I wake up screaming like I’m back over there
        I learned a thing or two from Charlie don’t you know
        You better stay away from Copperhead Road
        -Steve Earle
        Just outside Mountain City, Tennessee is where Copperhead (Hollow) Rd truly does exist.

    • Ed C says:

      Well, I’d rather pay a little more and buy from a dispensary. I know what strain I am buying and whether it is indica, sativa, or a hybrid. It isn’t all that expensive considering the little that is needed to get high. I wouldn’t know how to get it on the black market — I don’t run in those circles — at least not anymore. Would I be getting a known quantity or ditch weed?

  14. otishertz says:

    High end indoor is a different product than outdoor. It probably has an eventual price floor around the cost of production plus a normal profit. Right now the price of indoor is below the cost of production for most, but not all, due to seasonal outdoor oversupply from the gold rush pulling the whole market down.

    Most outdoor recreational ends up getting extracted into oils. Recreational outdoor here has a size limit of 40,000 square feet. Indoor is 10,000 feet.

    There already are vast hemp fields in Oregon which is the non psychoactive CBD market where products cross state lines. That Hemp is almost all extracted and I agree with Wolf’s assessment there about large scale production and commoditization. It is already well under way here.

    Oregon has had a moratorium on new licenses for two years to reduce initial oversupply. The OLCC just started on producer applications submitted in February 2018. Indoor gardens have strict size limits in most states. Every country and state is a closed market or walled garden, so to speak. I expect this to continue for several more years.

    The stocks mentioned most often are Canadian stocks because cannabis businesses had early access to the Canadian stock exchanges, unlike the US where it has been very difficult to get a checking account because of the feds. Only the most well capitalized companies have an easy time with banking and they pay a very heavy price in fees.

    The recreational market has several tiers of quality like with wine. The purity, potency and consistency of indoor cannot be achieved outdoors. The eventual national brand names will have to be pure and consistent.

    A big difference between wine and cannabis is that THC does not have a uniform effect from one strain to the next due to entourage effects from widely varying terpene and cannabinoid profiles that affect the experience.

    The effect can be analgesic, up, down, happy, creative, sleepy, hungry, or no psyhoactive effect. The effects of wine are more or less the same from grape to grape. This makes proprietary strains with proprietary effects more possible with marijuana.

    Another difference is the magnitude of possible ways to consume marijuana, not just liquid form like with wine.

    The real profit at the moment is in vertically integrated retailers that grow their own because retailing at even $5 a gram is $2270 a pound.

  15. Michael Gorback says:

    Pilgrim, pot does not cure cancer. It eases the pain and increases appetite (cancer patients tend to lose weight not only due to tumor burden but loss of appetite).

    With respect to pot being illegal, that was due to the joint efforts of William Randolph Hearst, the BND, a hideously uninformed Congress and outright lies reported by the Congressional committee. The committee met with a prominent representative from the AMA – an MD/JD. He explicitly told the committee that the AMA opposed criminalizing marijuana.

    When the bill came to the floor most congressmen had no idea what marijuana was. One member asked what the AMA thought. The chairman of the committee lied and said the AMA agreed it should be illegal.

    As for Hearst’s role and motivation, the history of his yellow journalism attack on marijuana is well documented.

    • Pilgrim says:

      Michael Gorback: “Pilgrim, pot does not cure cancer”-

      Too many articles like these to ignore:

      “The National Cancer Institute, mandated by US law to educate Americans about cancer and the latest research efforts, even shows that cannabis does, in fact, kill cancer cells.
      The organization admits that the cannabinoids in cannabis inhibits tumor growth by causing cells to die, blocking cell growth, and blocking the development of the blood vessels tumors rely on for growth”-

      “A woman claims cannabis oil has ‘cured’ her terminal cancer.
      Joy Smith, 52, from Coventry, was given just six weeks to live after being diagnosed with inoperable stomach and bowel cancer in August 2016.
      Desperate for a solution, Ms Smith reluctantly took cannabis-based tablets, alongside chemotherapy, after reading about a cancer patient in the US who went into remission after producing her own marijuana oil.-

      Many more like these, just google it.

      • Cas127 says:

        When you are citing the Daily Mail for medical expertise…you need a doctor.

        Send us links from Pubmed.

    • Dan Romig says:

      In Minnesota, the majority of citizens are in favor legalization. This issue was brought before the legislature last year, and was shelved due to Republican opposition. It may or may not be voted on in this year’s session.

      As printed in the editorial letters of the Minneapolis Star Tribune on September 9, 2019:

      “The United States of America was founded on the principle of personal freedom and liberty. So much so that in the preamble to the Declaration of Independence, we are guaranteed life, liberty and the pusuirt of happiness.

      Some adult citizens enjoy consuming alcohol, and some enjoy nicotine. Adults in Minnesota may enjoy these legally. But in Minnesota, adults who would enjoy cultivating and consuming cannabis in the privacy of their own home are, by law, denied this personal liberty and freedom.

      Attorney John Hagen is against legalizing recreational pot, as his Monday Opinion Exchange piece says (“Democrats back legalization movement at our peril”). Hagen argues that cannabis is dangerous to children, and he uses this to justify keeping it illegal for Minnesota’s adults. However, if this is valid justification for the prohibition of cannabis, it should also be applied to alcohol and nicotine.

      History teaches us about the repercussions of the Volstead Act. Today, we have many citizens incarcerated for possessing cannabis. How is this different?

      I assume Hagen is well-schooled in matters of the law. He also mentions the word “libertarian” seven times in his essay but advocates withholding said liberty from adult citizens in Minnesota. Hagen, please read the Declaration of Independence and explain to me why I can grow apples in my Minneapolis yard to make hard cider legally, but I can’t grow cannabis in my home, for private and personal enjoyment, legally.”

      Daniel Romig, Minneapolis

      • Lisa_Hooker says:

        “However, if this is valid justification for the prohibition of cannabis, it should also be applied to alcohol and nicotine.”

        You forgot caffeine, and the most insidiously damaging drug of all – sugar.

        • California Bob says:

          As bad as sugar is, high fructose corn syrup may be worse.

        • Lisa_Hooker says:

          sugars == glucose, fructose, galactose. sucrose, lactose, and maltose. Fructose does seem to be the hardest on your liver.

        • polecat says:

          Don’t forget about those cheetos.. they’re hecka addictive !

      • Frasersgrove says:

        There was a line of trucks with Minnesota tags last weekend at the pot shop on Regent Ave. here in Winnipeg. They were ice fishermen on their way to Lake Winnipeg and needed to stock up before heading out onto the ice for a few days of hunting greenbacks…

      • Ed C says:

        Well, recreational use is expected to be on the ballot here in AZ in November. I will vote yes. I voted yes to medical marijuana thinking I might benefit from it one day. I have my MM card now. I suppose recreational use passage doesn’t matter much to me now but I am in favor of liberty and against the war on drugs.

    • Lisa_Hooker says:

      Any studies bother to create stats on decreases in alcoholism? Aggravated battery? Murder? Rape?

    • Harrold says:

      According to the Colorado Division of Criminal Justice report in 2018. The number of citations for marijuana-only impairment stayed steady between 2014 to 2017 at around 7 percent of all DUI arrests. That’s roughly 350 citations out of nearly 5,000 DUI arrests each year.

      Alcohol by far, is the greater danger.

  16. Michael Gorback says:

    Some edits.

    BND should be FBN, Federal Bureau of Narcotics. The FBN, like everyone else at the time conflated hemp with plants containing THC. Industrial hemp has negligible THC. Technology back then could not show the distinction so hemp was considered to be the same as marijuana.

    However, wealthy and powerful men like Hearst, Mellon, and DuPont had various economic interests in killing off industrial hemp. The erroneous conflation of industrial hemp with marijuana helped them demonize hemp.

    The AMA wasn’t really against criminalization. The law was intended to tax and regulate hemp out of existence. Part of the tax burden would have fallen on doctors.

    There were no respectable players here.

    When the Shafer Commission couldn’t document any major issues with marijuana, Nixon just dumped it in the trash.

    This has been, and still is, all about the money.

    • Dan Romig says:

      “Hemp for Victory” was a film produced by the USDA in 1942 to encourage farmers to grow as much as possible. The U.S. Navy’s ropes in WW II came from American farmers’ hemp.

    • polecat says:

      Sooo, has the Keebler Elf now been reduced to sitting in a musty broom closet, eating stale cracker words .. seeing as how ridiculously outta touch he was ?

      Anyone care to answer ? .. Anyone ? Bueller ??, anyone at all ?

      Well then .. Oh Ok, you in back row.. umm, Mr. …. ‘Spicoli’, did I pronounce that right ?

  17. travis lewis says:

    Market makers seem to be able to put stock prices any where they like.

  18. Michael Engel says:

    SPX got cancer.

    • Lisa_Hooker says:

      Just about the most succinct and laconic comment you’ve ever made. I enjoy your comments immensely.

  19. Iamafan says:

    Well that went fast. Classes here canceled till the 23rd. National Guard called out to New Rochelle. Westchester now has the worst community spread in the USA. Ironically, an old classmate of mine was put to induced coma due coronavirus in Paris, France. He was just a visitor.

    Pretty soon we’ll need pot to calm down.

  20. polistra says:

    Impressive dumps, and (as always) impressive graphs by Wolf.

    The motivation side of the pumping was just too wildly obvious. I listen to a local ‘business talk’ radio station for background noise, and for the last couple years ALL of the local and national shows were pumping these stocks. They shows had constant interviews with CEOs who were “passionate about the cannabis space” or “passionate about the blockchain space” or “passionate about the cannabisPLUSblockchain space.” It was a carnival atmosphere. Anyone who thought these things were investments deserves to lose his shirt.

  21. Michael Engel says:

    1) The Pottsville Banking system .
    2) Banks borrow o/n at one and a quarter and lend at twenty.
    3) Pottsville bank is a good bank. It make a lot of money.
    4) With lower rates, Pottsville bank will lend more and make more money.
    5) Lower rate, higher price.
    6) Higher prices, Pottsville bank can afford less high quality UST collateral.
    7) Pottsville bank borrow o/n by providing UST collateral. But high
    quality collateral is becoming expensive. Pottsville bank can afford little.
    8) On March 9 2020 UST was : 0.31%. Lower rates, higher cost.
    9) On Mar 6 ICE BBB was : 2.63%. Lower rates, higher price. BBB is still accepted. Soon it will change.
    10) On Mar 9 ICE CCC was 14.61%. Junk is junkie.
    11) In the next few years US yield curve might be inverted. It will become an anti parabola underwater. The 3M @ around zero, but the heavier long duration will be sinking deeper, swimming with the fish ==> Pottsville bank will go BK, eaten by the sharks.

  22. MC01 says:

    When this frankly ridiculous lockdown will expire I’ll go out and take some pictures of the ridiculous number of pot shops that have popped up around here since the stuff was partially legalized.
    These places have sprouted like mushrooms everywhere and kinda like mattress stores they are always deserted, raising the same interesting questions about their financial survival.

    • MB732 says:

      MC01, OT but you are in Italy, Yes? Would like to hear your thoughts on virus situation. Maybe worthy of full article-?

      • Wolf Richter says:

        Coming very soon. This morning.

        • CreditGB says:

          For your consideration:
          Why, oh why, didn’t the global, EU, and US economies and their health care facilities and systems collapse under the regular flu season stats? Just asking……

          2019-2020 US flu season thru 3/5/20:
          CDC estimates that so far this season there have been at least:
          32 million flu illnesses,
          310,000 hospitalizations and,
          18,000 deaths from flu.

    • polecat says:

      About on par with tatoo parlors and nail salons ..

  23. Bert Powers says:

    “Never give a sucker an even break”

  24. Unamused says:

    An acquaintance who was a broke college student in the 1960s informs me that, back in the day, ‘pot can get you through times of no money better than money can get you through times of no pot.’ That was back when blacklight posters and beaded curtains were a thing, I suppose. She attributed it to somebody named Gilbert Shelton.

    Freewheelin’ Franklin: “Don’t get burned!” Should have told it to the investors, especially those who will now be facing the prospect of getting through times of no money.

    • Lisa_Hooker says:

      But, Mr. Natural, what does it all mean?
      It don’t mean shit.

    • Frasersgrove says:

      Look up the Freak Brothers comic from the 70’s, that was their saying…

      • Ed C says:

        Are we talking Robert Crumb the cartoonist here? I think I was walking like Mr Natural in Amsterdam after I got high. That was a fun business trip, many years ago.

  25. Paulo says:

    Back to the article. Pot operations are also collapsing in Canada. Why? Everyone now grows it at home and the legal price is about 2 times what the black market is. Furthermore, strains are now so powerful it does not require any ability, whatsoever, to grow stuff at home that knocks you down and out. The biggest problem apparently is pacing yourself. My friend describes it this way. “I take this little bit, (the size of a BB) and take one hit off my pipe. Then I wait awhile and see how it goes? Occasionally I’ll take a second hit.” This is outdoor pot he plants every summer.

    I remember growing pot when I was a kid in high school. Haven’t smoked it for decades. I figure Govt likes people stoned and happy because their expectations are lower as is their inclination to think/protest/vote…whatever. Ahhhh, maybe I’ll just give in and grow my 4 legal plants alongside our tomatoes this year. The new greenhouses are almost done!!! My buddy already has promised me some seeds. hmmmm I’m retired anyway, might as well mellow out. :-)

    • Lisa_Hooker says:

      Everyone’s always talking about responsible planning. Paulo, that sounds like one fine plan. ;-)

  26. Dave Mac says:

    For light relief I subscribe to the newsletter by the Financial Astrologer Mahendra Sharma.

    Let’s just say he’s been touting cannabis stocks as the next dotcom bubble for quite a while.

    Yet another “guru” bites the dust

    • Unamused says:

      How did he fail? He correctly called the bubble. That’s a ‘good guru’, as John once said.

  27. Iamafan says:

    FYI, we are going to get the highest weekly repo recorded in h.4.1 tomorrow. Estimated $242.375 billion for the week. That’s after going through $610.90 billion if you count those that also began and expired during the week.

    The Fed has failed. Repo getting worse.

  28. Augusto says:

    Hey, Pot aka Skunk will make a comeback as a deterrent to Covid-19, right up there with incense and garlic. Glad to see this fake industry go down the drain. Grow it in your back yard, but just don’t smoke it around me…I hate the smell…me and Covid-19.

    • Iamafan says:

      Whisky smells better. I can’t believe my old classmates are still pot heads.
      We are all retired and most have died already.

      • Augusto says:

        I have one friend doing Up his will. He thinks if he gets this he’s a goner, and he is probably right.

      • VintageVNvet says:

        Ditto, but most of the older pot smokers I know do so to reduce constant pain and maintain their taste buds so they can enjoy their wine, food, etc., mostly being cancer ‘survivors’ of one sort or another, and mostly vets from VN era too.
        A friend tells me, after studying the latest from actual recent research, he takes about 1/10 gram per day of one of the newer and much more potent pot, so an ounce, lasts him 6-8 months.
        Apparently, with age, the ”endocannibinoid’ system of the human body, maybe every mammal, begins to slow down, and just a very little bit of pot, etc., AKA ”phytocannibinoid” stimulates it to reduce pain and help with many other challenges of aging.

    • polecat says:

      Think I’ll dig out the 13 century plague mask out of the grow closet .. and traipes around town, soothing the victims with my palliative words, waving a smuded pot.

  29. Iamafan says:

    Pot = oversupply. Price goes down. Simple.
    Whisky? Bottle prices are up but Diageo is down last I checked.
    I think making decisions or predictions when the VIX is over 50 is nuts.
    Enjoy whatever hobby you have.

  30. CreditGB says:

    Clearly, pot stocks were a short term pump and dump. Should have invested in a longer term pump and dumps, like WeWork, UPER, Tesla or Lyft. By the way, those are still looking for new investors… don’t want to miss out. FOMO!!!

  31. Michael Engel says:

    1) The DOW plunged to Feb 2018(L), but the long duration are in green.
    2) At 3.55PM I clicked buy on Pottsville bank.

  32. Seen it all before, Bob says:

    From what I’ve read, Cannabis cures or alleviates every known disease afflicting mankind.

    Does it cure Covid-19?

  33. Harvey Cotton says:

    It completely makes sense to dabble in pot stocks. The thinking is that one of these tiny companies today will win the Cannabis Wars and be like the equivalent tobacco giants Altria or Phillip Morris.

    • MC01 says:

      Do you mean they’ll buy a startup making e-hookah which will cause respiratory ailments to users and a ton of legal troubles to them?

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