BLACKROCK Municipal Income TRUST V.BFK.P

RE:RE:RE:Who keeps gaining market share?

[quinlash]

IMHO the Black Market is the Black Market and it will be around until the end of time, period.  Criminals are criminals and the desire for fast and easy money is in everyone from those in dark allies to the ones in $20,000 suits, sitting high up in office towers on Wall Street.  We need to keep that in mind.

The margin that the black market has is high.  They do not have employees that get paid holidays, or high end labs and green houses that produce high quality product.  They simply grow what they can as cheaply as they can and pawn it off to those who as satisfied with the price and quality.  

Some consumers will opt to buy from the black markets and not from legal sources.  This will be driven primarily by two things. First is Money; if a cannabis consumer cannot afford the same product offered by legal sources but can afford it through illegal sources then they will buy from the Black Market.  The second reason they will buy from the Black Market is ease of access to the product they are interested in.  If they are simply looking to smoke a joint and they have no easy access to buy a legal joint... they will buy from the Black Market.

So with the above in mind this is what is going on and will happen.  As companies such as HEXO lower their selling price (as we see with the HEXO Original Stash product) more consumers will opt to try, or switch to, the higher quality product offered at (or near) the same price as that available on the Black Market.  The next thing to happen is the Cannabis 2.0 products.  These are products such as the Vapes (again, recently rolled out by HEXO), CBD oils and the related products (Rolled out by HEXO), the Cannabis Infused Drinks (HEXO.. please.. get on with it.. ) and then finally things such as the edibles (again, planned by HEXO). 

These Cannabis 2.0 products cannot be easily produced by the Black Market and therefore consumers wishing to have access to them will only have one source.. the legal companies producing the products.  How well these products perform will be determined by how well they tastes, the effect the user gets and well that meets their expectations and the price versus value story that retailers need to work within to sell the product and meet their needed margin to be profitable.

With regards specifically to the drinks. HEXO is working with the 2nd largest brewer in North America, Molson-Coors.  Molson Coors has apx 50 years experience producing drinks.  Molson and HEXO now have not one, but two joint ventures to sell the products across Canada and into the United States.

As investors with HEXO, or considering the company as an investment, we need to look at what is ahead for the company as we can only trade the company from where it is today and where we expect it to go for the duration of time we are willing to remain invested.  Investors considering the next development in Cannabis Products (drinks, edibles etc) we need to think about how much demand may be out there for these products, how well they will sell and how those sales will appear on each of the QTR reports (again, for the duration of the time we are invested).

As an investor, I have opted to place my bet on HEXO.  Others may see it differently and decide not to invest or bet on other companies in the sector.  Either way (place a bet on HEXO or not), I certainly would not bet again them considering who they are partnered with.

That is JMHO.. on a Saturday.. while I wait for coffee :)

All the best

Q















  

Matteo1234 wrote: I guess the bright side is lower prices take share away from black market. Put the kaibash on it. Then Shabangles.