Big Weed: Marijuana Legalization Leads to Big Weed Budding

Does weed go with lobster?

Big weed is getting bigger. Ethan Miller/Getty Images

Earlier this month, r/wallstreetbets, the iconoclastic poster-investors behind the GameStonk saga, came for marijuana.

For about a day, retail investors egged on by the internet pumped shares in certain publicly traded cannabis companies—most of which had been shorted by Wall Street hedge funds, r/wallstreetbets’s mortal enemies—to double in value, before crashing back to their original prices by the time markets closed Friday.

The timing was almost certainly coincidental, but the brief rise-and-crash cycle of “WeedStonks” managed to conceal the real action in cannabis last week.

Big Weed is getting even bigger, with direct assistance from lawmakers and policymakers, who have legalized cannabis in a way that, deliberate or not, all but ensures commercial cannabis is a playground for big companies, with big pots of money.

“The era of big cannabis is almost unavoidable, because of the regulatory complexities, and because the fixed costs of business are so high,” said Sanjay Tolia, founder and managing director of Bengal Capital, a Southern California-based cannabis-focused investment fund.

Regulatory complexities include restrictive and often confusing limits on who can grow and sell cannabis. Many states that now have booming cannabis industries are home to companies that have grown into multi-state operators also restrict the number of sales or cultivation licenses they issue. This has helped…

Does weed go with lobster?

Big weed is getting bigger. Ethan Miller/Getty Images

Earlier this month, r/wallstreetbets, the iconoclastic poster-investors behind the GameStonk saga, came for marijuana.

For about a day, retail investors egged on by the internet pumped shares in certain publicly traded cannabis companies—most of which had been shorted by Wall Street hedge funds, r/wallstreetbets’s mortal enemies—to double in value, before crashing back to their original prices by the time markets closed Friday.

The timing was almost certainly coincidental, but the brief rise-and-crash cycle of “WeedStonks” managed to conceal the real action in cannabis last week.

Big Weed is getting even bigger, with direct assistance from lawmakers and policymakers, who have legalized cannabis in a way that, deliberate or not, all but ensures commercial cannabis is a playground for big companies, with big pots of money.

“The era of big cannabis is almost unavoidable, because of the regulatory complexities, and because the fixed costs of business are so high,” said Sanjay Tolia, founder and managing director of Bengal Capital, a Southern California-based cannabis-focused investment fund.

Regulatory complexities include restrictive and often confusing limits on who can grow and sell cannabis. Many states that now have booming cannabis industries are home to companies that have grown into multi-state operators also restrict the number of sales or cultivation licenses they issue. This has helped…

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