Cannabis U.S. Companies

[phattrader]

here is an interesting article regarding mj tax in california. this is going to put pressure on legit growers if taxes are established near the high end of the bracket. there is already a significant black market which is well established. how many people will pay $330+ an ounce for weed on january 1st when the day before they could get black market weed...same bud...for $230-$250 and can still get it. how do the authorities in the field eventually differentiate between the two?

http://www.dailymail.co.uk/news/article-5037423/Marijuana-tax-California-rise-45-percent.html

this is going to become very interesting as canada legalizes in july. the u.s will be awash in black market weed, as if we're not already, which could bring the price down further for illegal weed which will really squeeze legit growers having to sell such heavily taxed weed.

so a future scenario will be getting busted, not for the bud, but for not having a tax stamp on your bud? or perhaps since smoking is bad for you we could see a larger shift to edibles etc and a move away from consuming mj with fire? whether that would help on the tax collection i don't know. possibly.

on the plus side for the end user the price of weed should go down if your willing to buy it the way you do now...

it seems such a high tax will encourage criminal activity which of course has already been flourishing in the field long before even mmj came along.

does this have a possible negative impact on grow stocks? it could cut their margins and force them to lower production possibly which means less revs etc. we shall see how it works out and what the actual public consumption of legal marijuana turns out to be.

it could benefit companies that sell grow products because citizens will be able to grow 6 plants at a time. the cost of the grow gear would pay for itself by the 2nd harvest for the regular smoker.

interesting stuff imo.

GLTA