Cronos Group Inc T.CRON

RE:Avoid the Bag!

[Updownsideways]

I'd say that's an apples to oranges comparison to the dot.com bubble. That hype eventually had extreme difficulty turning a website idea into monetary success with revenues, being as it was a brand new industry. The difference with the cannabis sector is that this industry has been around a long long time, just only in the black market. We also know what the market prices the product at, an average of $10/gram dried bud. So the unknowns with the cannabis sector are small compared to the unknowns of the dot.com bubble during that time.

But I do agree current valuations in the cannabis sector are very high, depending on the recreational market to materialize support for these prices. But as we've seen in the states that have gone recreational, the market size ended up being larger than what was expected. So if we're expecting a 10b market, it could end up being more like 20b. If that ends up being the case, stock prices will continue to soar. But if something goes wrong with recreational, watch most pot stock prices fall 75-90%

TITOOO wrote:

Beware penny stock Marijuana Pump & Dumps! Marijuana hype is bubbling again thanks to a number of U.S. states voting to legalize recreational use and with Canada poised to do the same this coming spring. No doubt there will be some long term winners, but as with any bubble they'll be few and far between. And even those that do win, the payoff is not going to be as monstrous as many believe.

 

Why is everyone so excited? Marijuana as an illicit industry is worth more than $100 billion in North America, so the thinking goes that growing operations stand to cash in huge thanks to legalization.  Slow down Cheech, put down the Doritos and think for a minute.  

 

Pot in Canada alone is expected to become a $10 billion a year industry, but only a small portion of that money will end up in the hands of growers. After the crop is harvested it has to be processed, then it has to be packaged, next comes distribution and then retailing.  Oh, and let's not forget the tax man. All those expecting Cannabis grow ops to be gold mines, they're going to be disappointed.  Some will be profitable, some.....But they'll have to manage their business well in a highly competitive environment. 

 

It's a bubble, and as with all bubbles there are a multitude of Penny Stock promotions going on right now trying to cash in on the hype.  It's no different from the Dot Com days when worthless companies put a .com at the end of a word and saw market capitalizations explode beyond anything that could reasonably be supported by financial reality, check Pets.Com for reference.