Like little kids with mud pies, each believes they made the best and almost worth eating. The reality --- you don’t eat mud pies. Well, the kids in the cannabis markets are trading “mud” and convincing the public they are eatable.
And you know what?
Cannabis investors are eating them; big round ones, stacked in a pile is the trend, and buying the noise, “mine is better, mine is rounder, mine is better than yours.
Indeed, making mud pies is one of the great joys of childhood. At two-years-old, I spent many happy hours magicking up messy pies that can be used in open-ended imaginative games.
Imaginative games are what’s going in the cannabis market with companies trading shares (paper) like mud pies.
Last week, two cannabis giants with overly inflated capitalization made a “big mud pie” $3.4-billion deal: Canadian producer Canopy Growth announced that it had purchased the rights to acquire U.S.-based multi-state cannabis operator Acreage Holdings, contingent upon the potential U.S. federal legalization of cannabis.
What does that mean?
Mud pie that talk can be traded for another mud pie that walks.
Both mud pies are worthless like most cannabis investments. Mud pie building by cannabis kids was big in 2017 when retail businesses and licensed producers combined their pies to make bigger ones. 2018 saw big retailers going public with their pies and sold them to investors at inflated prices. And now, in 2019, the game is making megamerger pies like the Canopy-Acreage deal.
The pie makers call it vertical integration, which means putting one mud on top of another to make a stack. Large brand acquisition (mud pies) have made the rounds as prices of the unbranded flower dropped, and consumers are migrating toward branded products.
Wow! --- Mud pies made in 2017 are worthless? i.e. cultivation facilities were built with expensive dollars on the assumption that marijuana prices will continually increase in price. Declining prices and high cultivation costs means massive loses. Not one cannabis “mud pie” public company is making a profit from operations, and existing by selling more mud pies.
Now the mud pie makers of 2019 are “selling” a new, improved, shinier brown pie on the belief that the humble pie is worth more. Wrong again --- a mud pie is a mud pie.
DON'T BUY OR EAT MUD PIES.