The Paltry Economics of Cannabis
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In this video we analyze the legal cannabis business and why most publicly traded cannabis companies are losing money.
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#wallstreetmillennial
0:00 – 1:56 Intro
1:57 – 4:30 The Legal Weed Business
4:31 – 8:41 Competition
8:42 – 10:35 Ganja Glut
10:36 Future Outlook
@k.chriscaldwell4141
September 21, 2025 at 11:33 pm
So a grower I know in Oklahoma went all in on hydroponics. Then he got the first electric bill. Then his outside attempt on his farm was eaten by wild animals (Rabbits, etc.). Went with a greenhouse. Then Oklahoma changed all the proposed rules.
He’s back growing in the woods and selling to his usual “distributors.”
@crawkn
September 21, 2025 at 11:33 pm
You can't meaningfully compare profitability of long-established oligopoly industries with fairly new industries in which few operators are even publicly traded.
@chris3325
September 21, 2025 at 11:33 pm
Its clear that many in the comment section have no idea what is involved in growing and processing high quality cannabis. As the prices continue to fall quality will fall with it. A few years ago in Michigan high quality bud could get you $2800 or more per pound. Now dudes are having to let stuff go for a couple hundred. The economics of scale that large growers are trying to achieve will guarantee to reduce the quality. Properly trimming even with a machine requires a human being to physically handle every bud to clean it up. They simply cant afford to give that kind of attention when they have a giant warehouse and are harvesting at that level. Not to mention the chemicals and stuff they use on those grows.
@ericcarabetta1161
September 21, 2025 at 11:33 pm
Buying weed is like buying produce, and unless you get to the scale of the Resnicks, selling branded produce is a difficult venture. Since it’s too hard to compete on flower quality, they try throwing all their effort into branded products. But since the brands are mostly limited to individual states, there’s little opportunity to grow to the scale of national intoxicant brands like Marlboro or Coors. Keep weed off the stock exchange, support small growers and farms. Say no to industrial cannabis farms.
@ChrisB-yv1sj
September 21, 2025 at 11:33 pm
It’s going to be interesting when we start seeing the “tobacco” lawsuits against the weed industry. The very governments that allowed a space for this industry to operate will start suing companies to “recover the costs” of treating long-term health effects.
@brycedyck8450
September 21, 2025 at 11:33 pm
Can I remind everyone that it was expensive because it was illegal, and removing that revenue source from criminals was the whole idea.
@marksullivan7746
September 21, 2025 at 11:33 pm
I represent a number of cannabis companies with IRS issues. The main reason the cannabis industry struggles to be profitable is IRC code section 280(e). It bars cannabis businesses from deducting ordinary business expenses not directly tied to cost of goods sold. Those expenses become phantom income resulting in large tax liabilities that cannot be paid from existing cash flow.
@mageyeah7763
September 21, 2025 at 11:33 pm
This is what an efficient market looks like. Significant profits beyond actual operating costs is a market failure.
@ElijahRose-u6f
September 21, 2025 at 11:33 pm
I just got a firesale ad from Mazda
@Antropologis
September 21, 2025 at 11:33 pm
Another aspect is that precisely since cannabis was illegal for so long but high demand still existed, a robust network of underground growers and DIY growers also popped up. Tobacco is legal, but who grows and smokes their own tobacco? Same for alcohol? But weed, people HAD to learn if they wanted it because no one was mass producing it perfectly rolled like a cigarette
@markiangooley
September 21, 2025 at 11:33 pm
Here in my part of Florida the dispensaries are everywhere but they all seem to be part of big companies. Everything looks very slick and commercial if you’re just driving by…
@DanCooper404
September 21, 2025 at 11:33 pm
Casual user. I picked up a bag of gummies recently at the rez near my house, with 50 doses in it. 100-200 if I cut them up so as to just get a slight buzz (which I prefer). For $35 (no taxes on the rez), this'll last me at least a year.
@ionutturcutvoda3545
September 21, 2025 at 11:33 pm
Why do you say Maroboro instead of Marlboro ? 🙂 Just practice in the mirror 😀
@eccentricgreen7249
September 21, 2025 at 11:33 pm
I'm surprised you didn't mention subsection 280e of the tax code; its a huge reason cannabis companies have trouble turning a profit. Essentially companies that deal with schedule 1 products have to pay taxes on gross revenue and not net profit. They often send all potential profit to the taxman before they pay employees, suppliers, bills, etc. This is before the consumer gets hit with that 20%+ tax on the retail side
@alexstevenson7941
September 21, 2025 at 11:33 pm
How many people have done prison time for selling weed? How much does it cost to prosecute and jail them? Not to mention the cruelty of human life behind bars.
@celestialtl
September 21, 2025 at 11:33 pm
This is lies. The cannabis growers I am aware of are growing for medical use and then shipping it on the side to states that don’t allow its growing. Making a killing
@helvetiaresearch9973
September 21, 2025 at 11:33 pm
You should have mentioned federal IRS code 280E.
@sburn1919
September 21, 2025 at 11:33 pm
Awful narration
@wallacegrommet9343
September 21, 2025 at 11:33 pm
The pot shops have largely disappeared in Seattle
@OffendingTheOffendable
September 21, 2025 at 11:33 pm
Next stop legal meth
@OffendingTheOffendable
September 21, 2025 at 11:33 pm
Dope makes people slow
@wallace245ful
September 21, 2025 at 11:33 pm
True
@evanthesquirrel
September 21, 2025 at 11:33 pm
A friend of mine who grows for himself told me that if you want to make money from hydroponics you should grow lettuce
@peanutbutterjellytme
September 21, 2025 at 11:33 pm
In Canada , before legalization, there was great hype about the potential for corporate profits and government tax revenue. When legalization finally happened, people were lined up outside of the shops but anyone who was paying attention knew that this was just curiosity and would not last. Corporate types who knew nothing of the cannabis market or users saw this initial enthusiasm as proof that their ideas about the size of the market were valid. This encouraged them to spend billions of dollars developing grow facilities and retail outlets.
Pretty quickly though, all of these new users decided that their curiosity had been satisfied. Traffic plummeted almost to zero extremely quickly leading to the failure of many of these companies. In an extremely short time retailers went from lines around the block to a dozen or so in the store at a time to now what probably feels like a dozen or so a day. You can go into a cannabis retailer now and be almost guaranteed to be the only customer in there.
This was a huge miscalculation by companies thinking that they could capture the entire value of the previous illegal market and expand it with new legal users who were only avoiding it because of the law. What these companies did instead was saddle themselves with crippling debt while the illegal market, while markedly reduced, still thrives.
@Drofthechalice
September 21, 2025 at 11:33 pm
In the 1800s Great Britain gave up trying to regulate and tax charas ( hash). They realized cannabis growing wild was impossible to control. The black market then collapsed.
Not the case today. Legalization while not truly legal but regulated has allowed the black market to stay strong.
Farms back door the majority of their product to stay afloat and be profitable. This being a cash only business due to fed regulations has only attracted investment from organized crime.
@motorcitywestauto4674
September 21, 2025 at 11:33 pm
1 point missed here, is that marijuana is still available outside of a licensed facility, and because they tax it so much its cheaper to buy it from a dealer. The plus to buying in a store is its probably safer, but that doesnt mean people are not still using a dealer.
@Jmr-o5e
September 21, 2025 at 11:33 pm
Why would it have occurred to anyone that cannabis would be a good investment opportunity?
It’s a weed, very easily grown, and everyone has easy access to the same seeds and grow technology.
Therefore it will be a price-driven competition, and consumers will benefit.
Not investors
@noidreculse8906
September 21, 2025 at 11:33 pm
More A/I narration 🤮
Comments are closed.