Discussion for article #222532
These businesses need to form their own savings and loan institution, dedicated to this industry specifically. Then they should invest in loaning back to the members who will use it to improve their infrastructure and purchase property, and build some REAL assets with all those profits.
The pot industry could help finance the hemp industry, too, and since the entire bank would be dedicated to growers and retailers, etc, it would be much more transparent to regulators.
With all the cash they will still have, they could also service ATM’s across the state, and charge 50 cents a transaction, which is considerably less than the big banks, for people to make withdrawals, thereby creating another profitable part of the whole picture.
The CF&G …Colorado Farmers and Growers Bank and Trust.
Has a nice ring to it.
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There is a factor here that has not been mentioned much as yet in the whole story, and that is that because of the legal threat that has always been attached to selling pot, the costs at the final retail end were always extremely inflated, and not at all normal in terms of “retail” standards.
The thing is, pot is actually very cheap to grow, especially relative to the final costs that the old legal threat added to the total.
As most of us old-timers expected, the prices have remained at that artificial level even AFTER the legal threat was removed, which explains why the profit MARGINS for LEGAL pot producers are SO HIGH compared to, say, wine or beer distillation, or most any other retail product, for that matter.
Pot is really much less expensive to produce, even in its most sophisticated forms of oils and edibles, than traditional consumer products, and it is only the lingering influence of prohibition that creates the high retail prices.
But obviously, the market is thriving despite the high prices, those prices seem to be hovering but not dropping, and the results will be a very high profit industry compared to what it costs them to do business.
Certainly competition will eventually mitigate the high costs, but considering how easy it is for an experienced grower to clone-up, expand and increase their production, until that price drop starts to happen naturally, the profits they will reap will be much higher, just as a commodity, than anything else on the commodity markets.
It isn’t just a matter of how much they grow, it is a matter of how much they profit, and right now, that is driving the biggest cash cow in the history of Colorado commerce.
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I wonder if growers have to balance the price they can get on the black market vs. what they can get in legal states. The temptation to sell to both markets and keep the price about the same seems pretty high.
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No one knows yet what the ramifications will be, but if they enforce the legal boundaries it will probably force both the black market up and the legal market down, and eventually it will be a wash, and thereby take any reason to buy blackmarket out of the loop.
But no doubt, there will still be pot “moonshiners” dodging federal and state “revenooers” as long a there is money to be made, in any quantity or percentage.
“a network of uninsured cooperatives”
???
there’s a ton of question marks behind that fragment…
It leaves a lot of questions for me.
As someone who has visited Colorado, my view of the implementation of legal recreational weed is mostly good. The only down side to going to the store is the idea that the merchant probably has too much cash at the location. I note that some locations take credit cards now, so that should be a relief.
Commerce keeps moving in Colorado. School revenue is up. People have to look really hard to find anything bad to say about the reality of legalized hemp in the state, but there is some ways to go before the stigma around the plants use and sale is diminished.