Idiot of the day

$4.99 for bread!? I bought some for $1.89 (US$1.44) last week.

That grandma was lucky. The lovely Soviets systematically starved and murdered millions of Ukrainians in the 1930s.

It's amazing how an atrocious ideology that can't even provide basic food and nutrition is still thought of as caring and compassionate.


Filed under Diversity is Strength

More:

The halaal coloreds include luminaries such as Masud Ali, Big Dawg, Aisha, and Ahmed. Obviously, they're doing the jobs that Americans just won't do.

That's the lesson for all minimum-wage employees in the US: don't call out disgusting dishonest darkies when they're scamming the business. Why? Because standards are for White people.


Not fast but definitely furious

Officially, the Liberal Party wanted to legalize marijuana in order to remove the "criminal organizations, street gangs and gun-runners" associated with the drug, as Justin Trudeau put in a pithy bit of hyperbole during the 2015 election campaign. [...]

Yet while legalization has been a political victory for the Liberal government, the hasty rollout of the policy has been decidedly mixed, resulting in often-conflicting laws, massive supply chokepoints and comparatively high prices for what has been a relatively cheap, ubiquitous if illegal product for decades.

Why does the media portray the Canadian legalization of recreational marijuana as "rushed" or "hasty"? Trudeau won the election in October of 2015. The legalization occurred in October of 2018. Governments at all levels had three years to prepare for this event. The problem isn't that it was "rushed" or "hasty". The problem is that the governments have their tentacles in all aspects of the business.

  • Production licenses, harvesting licenses, sales licenses. The government has been so slow that some producers have had to destroy part of their crops because they didn't have the license to harvest.
  • Centralization of online sales. Ontario is the biggest culprit. All licensed producers (LPs) have to sent their packages to a warehouse in Mississauga from where the government mails the products to customers. Why!? The LPs have been mailing products to patients for years. They can simply mail it directly to new customers. Plus, that would allow them to get instant feedback on what's popular.
  • Excise tax. That's on top of the 13% sales tax.
  • No advertisements! The LPs can only advertise inside the retail stores. Genius!

The state of cannabis in Canada

Terry Booth doesn't hold back:

The CEO of Aurora Cannabis says that Ontario and British Columbia “shat the bed” when rolling out their retail models for recreational cannabis, and that the only provinces that “got it right” were Alberta and “perhaps Saskatchewan.”

The smaller Eastern provinces are doing alright. Booth is right about Ontario and British Columbia which have a combined total of one retail cannabis store open at the moment.

“We knew it was going to be a shit show,” he said. “The government sold us tax stamps that didn’t have glue and so our Plan B was getting a bunch of people with very wet tongues to start licking these stamps.”

The rules and regulations are extremely onerous for Canadian marijuana producers. People joke about how easy and cheap it is to produce. Hey, after all, it's called a weed! The producers are finding out that it's very difficult to grow at scale. Growing it in a basement is different than growing it in areas which are the size of multiple football fields. Plus, the licensing, security, and other bureaucratic requirements makes it incredibly expensive. Then, on top of all that, the government adds its retail margin, excise tax and sales tax. Then the customers complain that the guy down the street offers a better price!

“We spent a lot of money on branding, we sponsored concerts, events. We can’t do that right now. I’d be off to f–king jail if we brand like that,” Booth said, to laughter and some gasps from the audience. The Cannabis Act prohibits any form of advertisement and branding that depicts the cannabis plant itself and presents its consumption as a lifestyle.

American companies will build global brands and eventually slaughter almost all the Canadian marijuana businesses when Trump legalizes cannabis at the federal level. This is one big advantage for Canopy: it has become, in effect, an American-owned business. If you can't beat 'em, join 'em. Let's see whether Aurora Cannabis can align itself with a giant, cash-rich, American firm for long-term survival.


Bank profit protection

The banksters are at it again:

A Marketplace hidden camera investigation is raising questions about how bank employees are selling a pricey and controversial product marketed to help with credit card payments if you lose your job or get sick.

It's called credit card balance insurance, or balance protection insurance — and if you've signed up for a credit card, chances are you've been asked to buy it.

Yup. A few years ago, I applied for a credit card and got it in the mail. I had to call in to activate it. The customer service guy with a shockingly thick Indian accent repeatedly tried to get my approval for this balance protection scheme. I calmly refused.

He asked, "Why don't you want it!?"

"Don't need it."

[Repeats the magnificent benefits of the insurance.]

"Nope."

He wasn't happy about losing out on his commission.

At BMO, an employee seemed to have little grasp of the insurance product she was selling, struggling to explain balance protection insurance when asked to describe what it was.

"It's an insurance ... balance," said the employee, before grabbing a brochure about the product and reading aloud from it.

But don't you dare disrespect these smart wahmen! Anyway, too many bank employees are ignorant about the basic stuff they sell. Over the years, I've gone to the bank, sat in one of those nice rooms to transfer money, open credit cards, get a line of credit, setup registered plans, etc.

Almost always, the bank employee did one or more of the following:

  1. Searched about numerous financial terms on her computer.
  2. Asked someone else in the bank for help.
  3. Gave me incorrect information.

Apparently, having a pretty face and a vagina is qualification enough.


Gimme more!

She makes $31,400 a year if she works full-time for 50 weeks and she can't pay rent!? A two-bedroom apartment rental is around $2,000 a month in Orange County. She could share the apartment and pay $1,000 a month. That's certainly expensive but manageable. Yet, she states that sometimes she had to sleep in her car. Seriously, where is her money going? Her predicament has more to do with shitty money management than Big Bad Corporation.


Mediocre model

A viewer called in to ask about Canopy Growth Corporation which closed at $48.92 today. Brian Acker stated that his "model price" for WEED is $3! Even the BNN host was shocked.

Canopy has roughly 335 million shares. At a $3 share price, its market cap will be basically $1 billion. That would make no sense for the following reasons:

  1. Canopy has $1.4 billion of assets in Canada.
  2. They got $5.24 billion in cash from Constellation Brands yesterday.
  3. The EU will vote on some level of cannabis legalization next month.
  4. Canopy will very likely see over 200% revenue growth for the next calendar year.

Forget $3, I'd be stunned if the share price went under $30.


Lots of smoke

The distribution issues that have plagued the cannabis industry in the first 12 days of legalization are threatening to significantly impact the financial performance of major licensed producers, predicts GMP Securities analyst Martin Landry.

“The extremely limited distribution network in many provinces, fulfillment challenges in Ontario, inventory shortage in Quebec and LPs coping with limited availability of excise stamps may take several months to be resolved,” Landry wrote in a Monday morning note. “It becomes increasingly clear that recreational cannabis sales in 2018 will be much lower than previously expected.”

The LPs have been under tremendous financial constraint for the whole year since they have had to build up inventory for legalization. Plus, they have to deal with the legal lunacy of ten provinces. New Brunswick and Newfoundland were ready on day one. British Columbia has one store and the largest province of Canada has exactly zero retail stores!

Of course, the LPs aren't going to meet the lofty expectations in the short run. The analyst ought to take the blame for his dumb forecast.

Because of these logistical hiccups, GMP has downgraded its forecast of four major cannabis companies — Canopy Growth, Emblem Corp., Cronos Group and CannTrust Holdings.

Canopy Growth in particular, according to Landry, could see its FY19 sales affected not just because of distribution issues, but also because of a market strategy that involved only selling one strain of product on the OCS website.

"One strain"? On October 17, Canopy had eight different products in stock.

Today, Canopy has the following four products in stock:

They had two from DNA Genetics and two Tweed-branded for sale earlier but now those are out of stock. I would be very surprised to learn if they all count as "one strain".


Where's the weed?

Canada May Not Have Enough Legal Weed for a Year:

Dan Sutton is blunt about why he thinks licensed producers in Canada don’t have enough legal weed to supply demand right now.

“Most of these guys they’ve been wearing pinstripe suits their whole career. They’ve never spent any time on a farm and they don’t know shit about agriculture,” Sutton, founder of BC-based LP Tantalus Labs, told VICE. [...]

“Most licensed producers still have no idea how to cultivate cannabis in a repeatable way,” he said. He noted Tantalus Labs, which operates a 75,000 square-foot-grow, took two years to design its greenhouse and another two to build it. But he says others in the industry have set up facilities within months, which he doesn’t think is enough time to ensure they are running optimally.

A simple question:

Legalization has been years in the making in Canada, so why don’t we have enough weed?

Answer: Legalization has been years in the making but the bill to legalize recreational cannabis passed on June 19, 2018. Canada officially passed the bill just four months ago.

In the past few years, who would have given the licensed producers, literally, hundreds of millions of dollars to design and build greenhouses to harvest marijuana which they couldn't sell?

Forget that level of capital, the legal marijuana business in Canada was so distasteful a few years ago that the largest licensed producer lost its bank account! Yup, a big bank told Canopy Growth Corporation to find another institution for its account(s). CGC went to a credit union which was more than happy to accept its business. This only changed in January earlier this year when Bank of Montreal decided to do a bought deal financing for Canopy.

So, to answer the question in short:

  1. Legalization bill was passed only four months ago.
  2. Before 2018, banks treated marijuana businesses like shit.

Also, the founder of Tantalus Labs stated that his 75,000 square feet operation took four years of effort to design and build. Canopy Growth has 4.3 million square feet of licensed grow space in Canada. Had Canopy tried to be "optimal", then Canada would have an even bigger shortage.

Also, math is hard:

Reached by VICE, Tilray, which had a market cap as high as $20 billion in September but has seen its stock drop by about half since its record high, said it expects to have more flower and oil varieties available “soon.”

"Drop by about half"? The all-time high: $300. Today: $90. That's a 70% drop.


"Poverty" wage

It's hilarious and predictable that in the middle of talking about greedy Walmart, they also malign the fat cats as hateful towards Blacks and women!

The most important point in the video is that Walmart has razor-thin margins: under $3 for every $100 of items sold. If Walmart completely stopped building new stores and used the total profit from last year for raising wages for their employees, then the increase in the hourly wage of every worker will be approximately ... $2.20.

Today, the starting hourly wage at Walmart is $11. The rough maximum for such an employee would be $13.20. The entire profit of Walmart is not enough for a baseline wage of $15 per hour.


High Hummingbird

Having won the Academy of Chocolate’s 2016 Golden Bean for making the world’s best bean-to-bar chocolate, the Almonte couple behind Hummingbird Chocolate Maker have to wonder if one day their company might be comparably recognized by the High Times Cannabis Cup.

That’s because Hummingbird, which was launched in 2011 by Erica and Drew Gilmour, recently partnered with Canopy Growth Corp., the Smiths Falls-based, publicly traded marijuana company, to press ahead with creating a THC-laced chocolate product that could arguably appeal to gourmets who fancy a tasty buzz.

That's quite the move -- bringing chocolate back to the Hershey's factory that was abandoned. Of course, if the government refuses to allow cannabis-infused chocolates next year, then this will turn into pricey symbolism.


The A to Z Grinch

Employees across the country are accusing Amazon of ruining Christmas with its Oct. 2 decision to raise the minimum wage to $15.

[...] “We plan our lives around our pay,” says a fulfillment center worker in the Midwest. “How many families just got their holiday season cut to shreds?”

What did Amazon do?

Employees got restricted stock units, shares that would vest after a certain amount of time at the company, as well as variable compensation pay, or VCP. In non-Amazon jargon, it’s essentially a form of incentive pay. For most of the year, VCP allowed people to make a monthly bonus of up to 8% if they had good attendance and the facility met its goals.

However, in October, November and December — peak sales season for Amazon, which shipped more than 1 billion items during the 2016 holidays — maximum VCP would double to 16% in many locations.

Then, Amazon raised its minimum wage to $15. It was funny when so many employees cheered the news. Oh, Amazon isn't a charity.

Then came Oct. 2. The company wiped out VCP and (much of) the stock program in one fell swoop.

Still, that's $30,000 a year with two weeks off. That's a reasonable baseline.


The fruits of socialism

Some people learn the hard way:

As night approached, Sandra Cadiz wrapped her shivering daughter in a blanket and prayed for a ride up the frigid Colombian mountaintop known as “the icebox.”

The mother and daughter had fled Venezuela on foot, joining more than 650 migrants who walk away from the collapsing nation each day because they cannot afford a plane or bus ticket. Cadiz knew not everyone survived the trek across dangerous borders and an unforgiving terrain, but she feared staying in Venezuela would mean her already malnourished daughter going hungry.

How did this poor woman end up in this situation?

When Venezuela’s oil-rich economy was booming, her small stand selling candy, cigarettes and cellphone minutes paid for meat on the dinner table. And when a charismatic socialist named Hugo Chavez became president in 1999, she enthusiastically added Venezuelan flags and hats to her sales racks.

In those early years, she bought chicken, sugar, milk, even Kraft mayonnaise. After she won a seat on a new local council, the government rewarded her with a free two-bedroom apartment, where she marveled at the clear water that came out of the faucets.

Now, she's running away from the shithole that she helped to create.

[...] customers no longer had cash to spend at Cadiz’s store, and she struggled to feed Angelis, who a doctor said was at least 10 pounds underweight. She wrote repeatedly to government ministers begging for help as a single mother, starting her letters with, “A revolutionary hello!” She got no response.

(Laughs.) Obviously, Venezuela didn't implement socialism in the proper manner.


Canadian History

The first legal recreational cannabis has officially been sold in Canada at a shop in downtown St. John's.

In Newfoundland and parts of Labrador, which has a separate timezone from the rest of Canada, midnight comes earlier, and people were ready and waiting for marijuana to be sold to them over the counter.

The first sales went to Ian Power and Nikki Rose, who lined up outside awaiting the opening of the Tweed retail location on Water Street in downtown St. John's.

The first person to sell recreational marijuana in Canada was Bruce Linton, the co-CEO of Canopy Growth Corporation.


Totally glueless

The cannabis cultivators in Canada do not have enough supply for the recreational legalization which starts tomorrow. On top of that they have to glue a dumb government stamp on every SKU which will cause a further supply crunch:

At a warehouse in Smiths Falls, Ont., a row of sleek-looking machines are in full function, carefully pasting colourful stamps onto packaged cans and packets filled with dried cannabis.

It’s an efficient process that belies what has been a near-universal annoyance for licensed producers in the runup to legalization: the need to paste government-issued excise stamps onto hundreds of thousands of cannabis packages prior to sale.

Linton isn't amused:

“So you gotta put — appropriately so — different excise tax stamps for each province, but then the company that makes the excise tax stamp doesn’t put glue on the back. So now you have to find somebody to attach glue to stick on to the product.… Who would have thought that’s a thing?” lamented Bruce Linton, whose company, Canopy Growth Corp., ultimately decided to source machines that would just get the job done as quickly as possible.

It's funny that many talking heads are yapping about the looming shortage of marijuana and yet the government couldn't even manage to deliver a small piece of paper on time:

Among the issues were that the stamps arrived late, that they didn’t fit certain producers’ package sizes and that they had to be manually glued on to ensure that they fully comply with specifications listed in the Excise Act.


Too Much Intelligence

According to a new report today from Reuters, the Seattle tech giant was forced to scrap an AI recruiting engine after the company came to realize that the algorithm was excluding women.

It gets so much better:

Using data from a decade's worth of resumes, the engine was designed to scan employment and academic histories using recognized patterns from other high achievers, and some 50,000 keywords. But because the vast majority of the CVs came from men, it taught itself that male candidates were preferable, rejecting words like "women's" as well as graduates from all-female colleges.

(Laughs.) The AI was too good at detecting bullshit degrees. Of course, Amazon stopped it. The future version will totally respect wahmen!


Never a dull day for Canopy

So much has changed in the world of cannabis since 2013:

From the moment the federal government set out new rules in 2013 to encourage the industrial production of medical marijuana, the race was on.

But there was no reason to think Tweed Marijuana, created by Ottawa entrepreneurs Chuck Rifici and Bruce Linton, would be the one to win it.

On June 6, 2013, the day the new marijuana regime was established, the two had little money to invest, no production facility ready, and their firm had no licence from Health Canada to either grow or transport cannabis products.

Canopy Growth Corporation will be an engrossing case study for many business students in the future. I've followed it since it started trading on the stock exchange in April of 2014. It is the most ambitious cannabis firm in the world. If all goes well, then it'll be getting $5 billion in cash from Constellation Brands by the end of this month. 

There doesn't seem to be any middle ground. Either, Canopy dominates with the highest top-line for years to come or they waste the money and end up as an epic failure.


Astute Amazon

Amazon’s recent decision to raise the minimum wage it pays its workers to $15 an hour was greeted with enthusiasm and praise, with no one more pleased than independent Sen. Bernie Sanders, who tweeted: “This is what the political revolution is all about.”

Bernie is a socialist clown who got hoodwinked by the Goliath.

A week after Amazon’s announcement, The New York Times published a piece headlined Why some Amazon workers are fuming about their raise.” It turns out a lot of Amazon employees say they are mad about the wage hike because they’re now losing other compensation and bonuses that they valued more than a higher hourly rate.

No more financial rewards for good attendance and productivity. No more granting of Amazon stock.

Just one share of Amazon per year would be roughly $2,000 for a worker. That's a massive cut for a low-wage employee.

Notably, Amazon founder and CEO Jeff Bezos is also advocating for the U.S. federal government to increase the legal minimum wage, which is music to progressives’ ears, but is also very good for Amazon.

It’s easy for a company of Amazon’s size and with Amazon’s revenue to sacrifice a tiny percentage of their profits for a higher hourly pay rate, but for a lot of employers, even a modest wage hike would represent a significant percentage of what they take in.

Will Bernie tweet his support again? It's funny that bleeding heart leftists are happy and supportive when a beast like Amazon advocates for the destruction of its competitors.


The slow end to cannabis prohibition

CBD oil will be medically available in the UK soon:

Cannabis oil will be available on prescription to people with chronic pain across the UK within a month, it has been reported.

Currently cannabis-derived medicines are only prescribed in exceptional circumstances, when permission is granted by a panel of medical experts, but the Home Office is set to relax the rules.

Later in the article, we get this gem:

Cannabis oil and other medicinal cannabis treatments do not produce a high as they do not include the active THD which recreational marijuana contains.

THD? It's True High Definition!


The best bud from BC

TheCannalysts tour Broken Coast, and provide investors with a 'boots on the ground' look at how one of the pre-eminent producers in Canada do what they do.

Broken Coast grows what is widely considered to be the best cannabis flower in Canada. Aphria -- one of the Big Three Canadian marijuana licensed producers -- acquired them early this year. Watch the video:


Those Canadian kulaks

It's stunning when Leftists propose tax increases on the filthy rich in the modern world. Capital is extremely mobile. Wealthy people won't just sit around and let the government steal more of their money; they'll a) move it to another jurisdiction, b) simply work fewer hours, and c) hire accountants for some serious tax planning which, surprise!, results in lower tax revenues for the Leftist idiots.

One of the economics lessons I learned early on is that governments essentially have two choices when it comes to managing a budget: cutting spending or raising taxes. But what if raising taxes actually leads to lower tax revenues? That possibility was not covered in our Grade Ten class but seems to be playing out right here in Canada.

According to a new study out this week from the C.D. Howe Institute, the federal government’s decision to raise taxes on the top one per cent of income-earners likely only yielded about a third of the tax revenues that would have been raised without what’s known as the “behavioural response.” In turn, this also resulted in provincial budgets suffering fiscal losses greater than the federal revenues raised.

The government ignored its own advice from 1966:

[...] the idea of a top rate capping out at 50 per cent can be found in the 1966 Carter Royal Commission Report on Taxation [...]

“We are persuaded that high marginal rates of tax have an adverse effect on the decision to work … (and) on the decision to save.… We think there would be great merit in adopting a top marginal rate no greater than 50 per cent. With such a maximum marginal rate, taxpayers would be assured that at least half of all gains would be theirs after taxes. We think there is a psychological barrier to greater effort … when the state can take more than one half of the potential gain.”

The top marginal tax rate in the largest province of Canada is 53.53%. The Liberals raised the income taxes on the rich and ended up getting lower tax revenues. No wonder they are losing all over Canada in numerous elections.


Goliath is ruthless

Amazon today announced it is increasing its minimum wage to $15 for all full-time, part-time, temporary (including those hired by agencies), and seasonal employees across the U.S.—effective November 1. The new Amazon$15 minimum wage will benefit more than 250,000 Amazon employees, as well as over 100,000 seasonal employees who will be hired at Amazon sites across the country this holiday.

Hmm, why would Amazon raise its own labor costs compared to its competition? Wouldn't this hurt Amazon in the long r-

Amazon’s public policy team will also begin advocating for an increase in the federal minimum wage.

“We will be working to gain Congressional support for an increase in the federal minimum wage. The current rate of $7.25 was set nearly a decade ago,” said Jay Carney, Senior Vice President of Amazon Global Corporate Affairs. “We intend to advocate for a minimum wage increase that will have a profound impact on the lives of tens of millions of people and families across this country.”

Clever sons of bitches. Amazon attracts more workers in the short run while they destroy their current minimum wage competitors by forcing them to pay more than double to their workers in the long run! Yet, clowns will call them compassionate.


Marijuana Millionaire

Rob Armstrong didn't have any investment experience when he cashed out his retirement savings and bet it all on the cannabis market. The chef, who works at an oil work camp in northern Alberta, invested $37,000 in cannabis companies on the stock market.

"After 18 months, I turned that $37,000 into a million dollars," he told The Current's Anna Maria Tremonti.

Wow. The volatility must be excruciating for the noob.

"I can remember my first real bad day. I've got about an hour drive to work, and in that hour, I lost about $60,000," he said.

Yup.

Pat McKeough, a wealth management adviser, warned that investing in the sector is akin to buying a lottery ticket.

[...] "It's a legalization boom of a plant that's called weed, and for very good reason, it's not hard to grow — teenagers have been doing it for decades."

That's like saying that putting money in a ketchup company is silly because everyone can grow tomatoes. Weed is often not the finished product. It's an ingredient. For example, cannabis firms extract material from the plant, add oil, and make gel capsules for patients in Canada. Soon, many firms will be selling edibles especially cannabis-infused beverages. That requires serious capital, equipment, testing, and time.

How many teenagers are going to compete with that?

Also, before 2020, Germany will likely allow cannabis firms to start cultivating marijuana within her borders. This means that the entire EU market will be open for medical marijuana. That's billions of dollars of annual revenue. If that matures to becoming legal for recreational purposes, then it's tens of billions of dollars.


Isn't free trade grand?

Time for Canadians to bend over and get that free trade:

Canadian dairy farmers are panning the renegotiated trade pact between Canada, the U.S. and Mexico, saying the deal will undercut the industry by limiting exports and opening up the market to more American products.

[...] the newly minted U.S.-Mexico-Canada Trade Agreement, or USMCA, will grant greater market access to the domestic dairy market and eliminate competitive dairy classes, which the group says will shrink the Canadian industry.

The lobby group says the measures will have “a dramatic impact not only for dairy farmers but for the whole sector,” adding that it fails “to see how this deal can be good for the 220,000 Canadian families that depend on dairy for their livelihood.”

Canadians have been laughing at Trump for his horrible tariffs -- don't you know that free trade is super awesome, you doofus! Now, that the US is opening up the North American market (free trade FTW!), the Canadians are now crying. It's surreal to see so many people pontificate about FREE TRADE while simultaneously support protectionism.

Anyway, it's kind of funny that Canada comes last in the name. Also, every time I see that acronym, my mind starts saying United States Marine Corps Aaaa ...


Tilray mania ends?

Tilray was driving almost the entire cannabis space in the past few days. Tilray goes up, most other marijuana stocks follow. When Tilray drops, the rest do as well. Today, this correlation broke down with each passing hour. At the close, Tilray was down 17.62% while Canopy Growth was up 6.29%.

Tilray has roughly $25 million in cash. Canopy will be getting $5.1 billion next month. There will be a lot of tears for those who're holding Tilray.


A to Z

Jeff Bezos started Amazon 24 years ago. The company nearly went bankrupt after the dot com crash. It's stock price was at $5 in late 2001. Bezos borrowed billions to keep his company alive. He sold a couple of million shares to raise money for his business enterprises.

Today, Amazon stock price hovers around $2,000. Bezos is the richest man alive. The company employs over half a million workers. Recently, Bezos decided to donate $2 billion to charity. This is the response he got from one economics professor.

Bezos owns roughly 17% of Amazon stock. Does this mean that the employees of Amazon have a say in how the millions of other people (who collectively own $830 billion) get to use their Amazon-generated wealth? Of course, not. That would be fucking absurd. Why would anyone even invest in a business when the resulting capital gains are subject to the whims of idiots?

Also, it's funny, how the employees are never subject to the massive downside when a business is failing. What's the worst outcome for an employee? Lose the job; find another job. What's the worst outcome for the employer? Lose the job plus lose millions or billions of dollars in wealth. Good luck starting another business.

Also, this credentialed clown has neither the genius nor the personality to manage a lemonade stand. He can't generate shit. Yet, he'll point at the success stories of our age and yell, "You're doing it wrong!"


Tilray mania

Tilray is a licensed producer of marijuana in British Columbia, Canada. It was the very first cannabis producer to have an IPO on the NASDAQ three months ago. The price was at $17 per share. Yesterday, it closed at almost $155 which made it the largest cannabis company on Earth with respect to market capitalization. The CEO went on a TV show and said that one day Tilray will be a $100 billion company which translates to a rough share price of $1,000. 

That was a very dumb move. This is likely how it played out today:

  • an epic short squeeze
  • sly speculators jump in
  • also, attracting noobs with a FOMO mentality
  • speculators flip shares
  • noobs become bag holders

Today, in only 52 minutes, Tilray's share price went from $300 to $151. Then, in 6 minutes, it spiked to $217. NASDAQ had to halt Tilray four times because of its crazy crashes and spikes. Tilray might well be a good long term investment but right now it's one spectacular bubble.

Prediction: Before the end of October, Tilray won't be the #1 cannabis company with respect to market cap. Canopy Growth Corporation will have regained the crown.


Money maker

33 days to go for recreational marijuana legalization in Canada. The news stories and hype will likely result in a manic bubble in the bud sector which will be followed by an epic crash. The big guns will make money as the stock prices spike and then make even more money shorting the sector. It wouldn't be surprising to see year-end news stories about poor fools who went all-in near the all-time highs and are down 50% or worse.


Smoking something strong

Cronos launches its second cannabis brand:

Today, Cronos Group Inc. ("Cronos Group" or the "Company") is pleased to announce the launch of its second cannabis brand for the domestic recreational market, Spinach™.

What the bloody hell?

On October 17, 2018, Canada is expected to become the first G7 country to federally legalize recreational cannabis. This watershed moment means that consumers in Canada will be able to purchase high quality Spinach™ without fear of persecution for their love of beautiful green plants.

Is this a joke?

"Cronos Group's first priority is responsible distribution so we made sure to select a brand name that we felt would not appeal to kids," said Mike Gorenstein, CEO of Cronos Group. "Spinach™ has been carefully curated to deliver on our promise to provide high-quality products to fun-loving mature adults who are sick of hearing about kale."

What's next? Broccoli?


Crummy Canada

The Financial Post on Canada's miserable investment environment:

Many business managers and economists have publicly expressed concern recently about a deteriorating environment for corporate investment in Canada. Federal Finance Minister Bill Morneau has rejected these concerns, notwithstanding data showing that capital investment growth has slowed dramatically in the past few years.

Why did that happen?

While many factors contribute to a country’s business climate, public policy — including at the federal level — plays a key role. Since taking office in 2015, the Trudeau government has raised taxes on upper earners, created mass uncertainty with its mandated carbon-pricing scheme, and run up huge budget deficits (raising the spectre of future tax increases). This contrasts with recent U.S. government initiatives to reduce the corporate tax rate and eliminate numerous costly business regulations.

Funny how the US president is not named for the booming economy.

Anyway, Trudeau also decreased the annual limit on the Tax Free Savings Account (TFSA) from $10,000 to $5,500. The mega rich with tens of millions of dollars likely don't care about that change but those in the middle class who would like to shield their tiny investments from taxes got a significant hit. A few thousand dollars a year invested plus compound interest could easily result in tens of thousands of dollars in capital gains taxes down the road.

Trudeau portrayed the TFSA as an unfair tool for the rich but in reality it's the best long-term investment account for low-to-middle income earners. For reference, the Individual Savings Account (ISA) allows UK citizens to deposit £20,000 (~$34,000) this year. So, Trudeau didn't merely raise taxes on upper earners, he also gave the middle finger to the average Canadian.


Not enough weed

With just weeks to go before recreational pot becomes legal across Canada, a new report commissioned by Health Canada predicts the demand for it will be substantially higher than widely anticipated.

Of course. When marijuana is legalized, the overwhelming majority will switch from the black market and new interested customers will want to try it. Also, edibles and beverages will be on the menu in 2019. That will be another boost in demand.

It calculated the amount at 926,000 kilograms for both recreational and medical use. That’s a whopping 41 per cent higher than the estimate of 655,000 kilograms by the Parliamentary Budget Officer in 2016.

[...] If the new report is on the mark, Canadians could face shortages after recreational marijuana becomes legal across the country on Oct. 17.

Surely, the cannabis growers and the government officials wouldn't mind elevated prices in the beginning. As supply catches up, the prices will naturally drift down.


Huge short squeeze

Short-sellers appear to have covered their positions in Canopy Growth Corp. in droves last month after news that the Canadian pot producer had lined up a multi-billion-dollar investment from U.S.-based alcohol giant Constellation Brands Inc.

Canopy Growth closed at $32.15 on August 14 in Canada. The stunning $5 billion investment by Constellation Brands was announced the next day. Yesterday, it closed at $68.83. That's a staggering 114% increase in just three weeks! Retail investors are buying. Institutions are buying. Shorts, of course, are scrambling, cursing, and buying.

The deal was announced on Aug. 15, when the short interest in Canopy was approximately 19.3 million shares, the IHS Market numbers show.

That figure began to decline noticeably in the days that followed, reaching as low as 10.4 million shares, the lowest level since February.

The legalization of recreational marijuana in Canada will be on October 17.

Prediction: Emotional noobs, traders, and shrewd opportunists push the stock prices higher in the cannabis sector followed by an epic crash at the end of October.


Can you delay gratification?

Or, in other words, can you become rich?

Dr. William Hampton: Existing studies have determined that many factors play a role in how much money a person will make. Some are very obvious, such as education and occupation, while some are less so – taller people earn more, for example. Our study was the first, however, to create a validated rank ordering of these factors (age, occupation, education, geographic location, gender, race, ethnicity, height, age, delay discounting) using machine learning.

Our results were interesting because when we compared the importance of these factors we found that how much a person discounts the value of future rewards compared to immediate ones (known as delay discounting) is more predictive of income than some other ‘big’ variables such as age, ethnicity, and race.

This is one reason why so many poor migrants from China become stunningly wealthy in a few decades in the West.

This is also why many poor people will remain poor. One could give each of them a million dollars but they'll be broke again a few months down the road. They simply don't save or conserve for the long term. Look at the people who start off in life as not-rich and then slowly build wealth over many years. The most common factor is their high savings rate.

The most spectacular example of that was Ronald Read. He died at the age of 92. He left behind $8 million. What was his profession? Janitor.


All you need is a nudge

Financial Post:

I read with great interest a recently released Ontario Securities Commission (OSC) report entitled Encouraging Retirement Planning through Behavioural Insights. It provides strategies for governments, employers, financial advisers and those planning for retirement to implement to make it easier to become financially independent.

Behavioural finance has risen to prominence recently, in part because of the work of “nudge” economist Richard Thaler, who won the Nobel Prize last year for his pioneering work in the field of behavioural economics. There can be psychological impediments to making financial decisions that are in our own best interest, but there are simple things we can do to encourage behaviour today that leads to better outcomes tomorrow.

The same government that borrows and spends with record high levels of debt is supposed to encourage better financial behavior in the average person? Instead of fucking with nudging people, perhaps the government can try to balance the budget.


Another bag holder?

BNN Bloomberg on the allure of marijuana stocks:

For one young investor, riding the green rush hasn’t exactly gone as expected.

“Performance-wise, it’s been crazy,” Shayan Tabaei, a 24-year-old software developer who lives in Richmond Hill, Ont., said in a phone interview with BNN Bloomberg.

Tabaei, an active participant in the popular “Weed Stocks” discussion forum on social news network Reddit, started investing in stocks for the first time in February. He has held pot stocks almost exclusively, with the exception of a recent position he took in a technology company.

This guy started "investing" six months ago.

“I went from being 25 per cent under overall in my portfolio to being 30 per cent up. Now I’m six per cent up,” he added. “I’ve never cashed out any big amounts. The lesson learned to me is to take profits as they come.”

That's not investing. That's short-term speculative trading. Seriously, the legalization date is October 17. The BIG revenue hasn't even hit the books and this guy wants to take profits.

“This is like the second coming of [the end of] prohibition,” Tabaei said. “The industry is new … When a bunch of the big tech companies were new, all of a sudden they just blew up out of nowhere. So I always had the mindset that the same thing was going to happen for pot stocks.”

That's true. The problem is that the spectacular rise started a couple of years ago. Canopy Growth Corporation, the largest marijuana company on Earth, had a stock price around $3 in 2016. It hit $44 in January this year. Today, it closed at $58.62. What's funny is that many new "investors" don't want to touch it because it's so expensive. Instead they jump into no-name, no-license, no-future penny stocks "thinking" that it'll be easy for their exciting "investment" to double or triple in a few weeks.

There will be a lot of tears when this bubble eventually bursts.


The benevolent Left

Socialist New York congressional hopeful Alexandria Ocasio-Cortez lamented the closing of her former employer but glided over the fact that it was closing because of the minimum-wage hikes she supports.

Of course.

Michael Saltsman of the Employment Policies Institute said politicians are to blame for the closure of businesses like The Coffee Place, which had survived for nearly 30 years. Saltsman said that rather than visiting her soon-to-be unemployed coworkers, Ocasio-Cortez should reevaluate her approach to economic regulation.

Fat chance. Socialism appeals to the two base and basic feelings of many people: greed and envy. Low-skilled workers should get a minimum of $10 $15 $20 an hour! The fact that money doesn't grow on trees and that many small businesses close their doors which means that those very same workers end up with $0 an hour is of very little concern to demagogues.


The tears of bag holders

Most People Are Idiots:

Kim Hyon-jeong, a 45-year-old teacher and mother of one who lives on the outskirts of Seoul, said she put about 100 million won, or US$90,000, into cryptocurrencies last fall. She drew on savings, an insurance policy and a US$25,000 loan. Her investments are now down about 90 per cent.

Over the years, I've talked to many Canadians who wanted to "invest" in crypto or an explosive penny stock. The common element is always their microscopic time horizon. They want to get rich tomorrow! One guy uttered this memorable statement: I will only invest in a stock if I think it'll go up by 50% in the next year.

Most people don't have the personality to delay gratification and save money. What's sad is that the many who do, end up going YOLO for lottery tickets or going FOMO on the latest get rich stock or scheme.

Building wealth is an excruciatingly slow process for the average person. Trying to do it in a few days, weeks or months usually ends in tears.


Not utilizing compound interest

You can't eat your house in old age:

A couple we’ll call Sally, 54, and Mike, 52, live in Alberta. They both work as personnel specialists, but have only been in their current roles for six and eight years, respectively. Sally and Mike have two children, aged 18 and 20, but their financial assets are modest: A house worth $400,000 on a 40 acre plot, and additional assets worth $148,000, including 12 acres of raw land, a car, a truck, four horses and a trailer. They also have $341,524 in debt, leaving their net worth at just over $200,000 — not a lot for folks expecting to retire in 10 to 15 years.

“We have put everything into our house and land,” Mike explains. “We have no RRSPs, no TFSAs, and no savings apart from $10,000 in chequing. We will have benefits from our employer, but with just a few years on the job, it won’t be a whole lot. Our dilemma is how we can retire with a monthly income of $5,500 after tax?”

No RRSP! That's like a 401(k) plan for those in the US.

These people worked for thirty years and completely neglected their retirement accounts. They missed out on three decades of tax sheltered growth.

Unfortunately, this mindset is quite common. Numerous people in the past few years have told me how they've bought a new house with a giant mortgage. They'll definitely start saving for their retirement once that 25-years-long debt has been paid off. One guy who told me that was in his late 40s!


The King of Cannabis

The life of Bruce Linton, the CEO of the largest cannabis firm in the world:

Long before he launched the medical marijuana company now known as Canopy Growth, Bruce Linton took at least 16 business trips to India. Most times, he planned to visit the Taj Mahal mausoleum in Agra, one of that country’s most famous tourist sites.

“I never got there,” he said. “Business,” he said somewhat ruefully by way of explanation.

A few stunning details about the firm:

Linton, who owns about 2.7 million shares, recalls the day Canopy Growth first began trading on the TSX Venture exchange four years ago at less than $3 per share. There were a lot fewer shares at the time, so the firm was valued at just $91 million.

“What did we have back then?” Linton asks rhetorically. “A building with three rooms in it and a big plan.”

So, yes, the value of Canopy has exploded 100 to one.

Incredible. Those who didn't invest in it at that stage, sorely regret the missed opportunity and those who did invest in it, deeply regret not investing enough!

Canopy Growth now controls 21 subsidiaries and has invested in 13 affiliates. This encompasses a wide range of activity, from production to research into new uses for marijuana’s active ingredients.

Cannabis products are going to have explosive growth in the next few years. Canopy is, no question, the global leader. The rest of the companies have to fight over the second position. Let's see which of them gets the attention of Big Pharma or a CPG giant.


It's time for a vagina

A serious case of the Insufficient Vaginas Problem in the city of Hamilton:

In the 2011 federal election 25 per cent of women were elected, compared to the 2015 election when 26 per cent of women or 88 females, were elected MPs.

Yet, women compose over 52 per cent of Canada’s population. Equal Voice, a “multi-partisan” organization dedicated to electing more women to political office, states that women compose 29 per cent of Canadian provincial MPPs and 26 per cent of MPs, still a lower number of women elected in most of Europe, parts of Africa and Australia.

More:

This year there are two women – Nathalie Xian Yi Yan, who has previously run for council seats over the years and Ute Schmid-Jones, who has run in the federal election as a Green Party candidate – campaigning for mayor.

[...] “It is said academically that females have many advantages and strengths that are better than men,” she [Yi Yan] said. “But eventually I believe the passion for the city and someone who really cares is a major thing. I love the people.”

Strange how those "advantages and strengths" don't translate to innovation and wealth in real life.

The best part is this comment by a fellow named John:

More femin-Nazi BS ... women know better ... they gave the USA Prohibition. They go power hungry every time. Merkel is killing Germany. The only woman that turned out well was Thatcher but there are NO Canadian Thatchers...all the women in this article are left to far left to far far left wannabe tyrants...won't be getting my vote


Constellation Brands to Invest Billions in Canopy Growth

Before today, the largest ever raise by a cannabis company was $600 million CAD dollars. Now, Constellation Brands, the US alcoholic beverage giant, will be investing $4.5 billion CAD in Canopy Growth Corporation.

Constellation Brands will increase its ownership interest in Canopy Growth by acquiring 104.5 million shares directly from Canopy Growth, thereby achieving approximately 38 percent ownership when assuming exercise of the existing Constellation warrants. Constellation Brands is acquiring the new shares at a price of C$48.60 per share, which is a 37.9 percent premium to Canopy's 5-day volume weighted average price of the common shares on the Toronto Stock Exchange ("VWAP"), and a 51.2 percent premium to the closing price on August 14, 2018. Constellation will also receive additional warrants of Canopy that, if exercised, would provide for at least an additional $4.5 billion CAD to Canopy Growth.

Wow.

As a result of the new shares Constellation is acquiring, Canopy Growth will immediately upon closing have proceeds of approximately $5 billion CAD [$4 billion USD] to bolster its leadership position in the global cannabis industry. This investment, the largest to date in the cannabis space, will provide funds which Canopy Growth will deploy to strategically build and/or acquire key assets needed to establish global scale in the nearly 30 countries pursuing a federally permissible medical cannabis program, while also rapidly laying the global foundation needed for new recreational cannabis markets. Canopy Growth's Canadian platform does not require additional cannabis cultivation assets, and management views other jurisdictions, including the United States, as strategic priorities requiring significant capital.

Constellation Brands has, in effect, added cannabis to their product portfolio. I have a feeling that there were talks in other countries like the UK and Germany where Canopy Growth will be building / buying greenhouses for cannabis production which will then supply Europe. That market, assuming recreational legalization, will be worth more than $100 billion.

Canopy already has $1.4 billion of assets in Canada. There will be a lot of international merger and acquisitions activity from them in the next two years. Canopy is already the global market leader in cannabis. Now, they will be expanding their empire.


Cannabis goes private in Ontario

The largest province in Canada will go all-private for physical stores that sell cannabis. This is economically a good move because the private sector will move faster to fill demand. Also, this undercuts the bloated public sector and the labor unions that have become voting machines for the Liberals.

Recreational cannabis will be sold online in Ontario when legalized this fall and in private retail stores across the province early next year, the government announced Monday, reversing the previous administration's plan to distribute cannabis through publicly owned outlets.

[...] A government agency called the Ontario Cannabis Store will sell pot online once it is legalized on Oct. 17, and a "tightly regulated" private retail model will be in place by April 1, 2019. The OCS will also be the wholesaler to private retail stores, the government said.

Some people think that private retail means easy access for young teenagers:

"If privatization is meant that any store will be able to sell cannabis, then I would say that this is highly problematic given our experience with tobacco sales that are available 24 hours a day at every corner," he said.

Schwartz, who is also the executive director of the Ontario Tobacco Research Unit, said private companies have a "profit motive." Their goal is to sell as much as possible which could mean less adherence to regulations, such as ensuring customers are 19 and older, he said.

This logic is quite amusing. Let's say, for the sake of argument, that if the sale of cannabis was exclusively managed by the public sector, then there would be zero direct sales to underage customers. Note that each consumer can buy up to 30 grams of the product which is worth roughly $300.

What exactly is stopping a legal 19-years-old buyer from selling / sharing his marijuana with his 17 and 18 years old buddies? It's irrelevant how professional and angelic the sellers are. The young customers all across colleges and universities will be lighting up in October.