Cannabis Catastrophe Canadian Style – Worse Than Bre-X
It’s hard know whether to laugh or cry at the Cannabis debacle playing out in Canada today.
Thanks to a toxic stew of government bumbling, administrative ineptitude, public greed, zero enforcement, zero gate-keeping, and massive online ‘marketing’, billions of dollars of capital have been destroyed over the past few years.
It is a Canadian disgrace that makes Bre-X look like small potatoes.
Let’s go through this point by point; it’s not too complicated. I’m going to focus on Ontario mainly because of familiarity, but it’s the same story across Canada.
The Liberal government made Cannabis legal in Canada and then shoved it over to the provinces to administer.
Ontario made the licencing application over-complicated thus creating a false high value for the people (mostly ex druggies and druggies who never got caught) who got the licenses. Fake news; fake value.
The bottom end stock promoters in Canada got a few wins early by correctly assessing the public would mindlessly buy any absurd Cannabis proposition. Who knows whether this was by insight or by dopey enthusiasm.
They then spent lots of the money raised on ‘marketing’ the stock online and in various other ways.
The Investment dealers in Canada realized that Cannabis was an easy sell, so they piled into the game big time.
Ontario made the licensing process very slow, so the stock game/bubble accelerated.
The market regulators and exchanges were nowhere to be seen; de facto supporters of the pump.
As the pump and dumps accelerated, the bubble became a self-fulfilling prophecy in the short term, sucking in dumb money from everywhere in Canada. The whole gang and toxic stew then started to pull international investors in – Americans, Europeans etc.
In the last while most of the Cannabis stocks have imploded as the obvious thesis that this was a low margin business became reality.
Imbecilic government regulation and implementation created the perfect environment for a Cannabis pump and dump hurricane.
That has now led to many class action lawsuits to be filed out of the US against Canadian actors. That’s a longer story I’ll leave alone for now. It’ll be fun to watch that play out; lots of actors are nervous as they should be.
It was widely known that it was going to be hard to grow the plant economically indoors or outdoors in Canada, never mind turn it into a profitable product; but that didn’t slow anything down.
Guess what – 99 % of the drugs you buy at the drug store are 100 % synthesized despite having botanical origins. Cannabis will be the same.
Cannabis should be treated like any other botanically derived drug. Canada and the rest of the world have very robust systems in place already to approve medicine.
Recreational use should be legal period; no licenses or special stores or other such nonsense, as long as a medicinal benefit is not implied.
If medicinal benefit is proven via Health Canada; sell it through the pharmaceutical system that already exists.