Canada Legalizes Marijuana but is the hype all smoke?

(repost from Tuesday 10/16/2018 Facebook page )
Good Morning,

Tomorrow Canada will be the second country to legalize Marijuana, and over the past couple of weeks, these stocks have seen exponential growth. There has been a ton of chatter, but not a lot of useful information around it. This weekend, The New York Times released an article highlighting this law change. This is a lengthy article but some good points are:

1. The country is trying to figure out the parameters around it
2. Analyst expect the industry to reach $5 Billion (6.5 Billion CAD) by 2020
3. Government and Corporate interest will impact the opportunities around it
4. Question marks surround how the illegal market will be absorbed or alienated

While these new stocks have a ton of good news pushing them higher, there has been minimal mention of the financial viability of these firms or how governments impact regulation. As a personal investor while it is great to hear all the stories, at the end of the day profitability matters if the strategy is more of a long-term nature. A couple points not covered by most are that most companies are not profitable, each province has control, but most important is that the government will be the middleman AND sell on the internet. This is before diving into their revenue recognition methodology which is convoluted. While the opportunities in marijuana (especially medical marijuana) are vast, the impact of government intervention hasn't been considered yet.

#financialliteracy #marijuana #potstocks #cannabis #canada #thenewyorktimes #tilray  #aurora #canopy #constellation #altria #financialfloyd #phillyfinance

https://www-nytimes-com.cdn.ampproject.org/v/s/www.nytimes.com/2018/10/14/world/canada/marijuana-legal.amp.html?amp_js_v=0.1#referrer=https%3A%2F%2Fwww.google.com&amp_tf=From%20%251%24s&ampshare=https%3A%2F%2Fwww.nytimes.com%2F2018%2F10%2F14%2Fworld%2Fcanada%2Fmarijuana-legal.html


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