(12-21-2021, 12:58 PM)Kerim Wrote:They would have distribution advantages that might be advantageous decades from now if the industry consolidates which is not a certainty. I don't use MJ but my friends that do seem to prefer to acquire it in various ways. Some like the boutique atmosphere. Some just use black market sources as they have for many years. I don't see them running to a convenience store to pay any kind of premium price.(12-21-2021, 12:01 PM)fenders53 Wrote: I'm not sure how they would command any sort of pricing power like they do in tobacco.
I agree completely. And for a bunch of other reasons as well, I think the "MO is going to make a lot of money in marijuana" is super wishful thinking. But it is really common thinking!
I liken it to my Wisconsin brewery story I often share. In the 1800's WI had over 600 breweries. Perhaps the largest per capita in the US. 98% of them were local and small of course. 100 years later WI still had a few dozen breweries and a few majors that kept all of the little guys in poverty until they acquired them or put them in BK. The 4-5 major US brewers that were dominant 30 years ago are now mostly owned by foreign entities and struggling some. Meanwhile Wisconsin now has 200 breweries. Most of them are small and doing pretty well locally or regionally. I will plan a meal stop at one of them and drive out of my way numerous times a year. I pay a 100% premium over the cost of a Budweiser and have for decades. There is really no way to know where the MJ trend is headed in 10-20 years. We cant wait 10-30 years to be right.
All that said MO will chug right along paying a good dividend for years IMO.