Paradigm shift in weed industry, says Jim Cramer



now one reason these talks have been so tough to own is that many shareholders seem to have unrealistic expectations there are some people who think that marijuana is going to be legalized in the u.s. at a federal level sometime in the not-too-distant future I hear that all the time let me tell you something that's not with this Congress even the CB decriminalization from late last year was less generous than it sounds you need to produce the stuff the way the Department of Agriculture tells you to or it's still off-limits and now we're starting to see pushback from the FDA which wants to establish a regulatory framework before it lets companies add the stuff to food products dietary supplements you've probably seen these CBD stores popping up all over the place but it hasn't been the slam-dunk that many investors thought it would be and the big packaged food companies they still seem very hesitant to get involved you know I asked all I'm about this more importantly recreational weed is still illegal a real crime it's a federal level and while the House Judiciary Committee started holding hearings of decriminalization yesterday this is a long way from becoming actual wall of course the states will keep legalize it in a piecemeal fashion but if you're betting that Congress will take action make it so that all the big say consumer packaged food companies would come in and start doing things don't hold your breath without the promise of legalization here in the US you have to make decisions one of the cannabis stocks based on the numbers no warmer optimistic promises and the actual numbers are complicated to put it diplomatically that brings us back to Kant if you quote the best degree player in the space a few weeks ago Kanak reported a quarter that was widely seen disappointing bested by controlling shareholder can't constellation which decried the weakness on their own conference call while canopy sales are still growing like a weed they saw a pretty sizable year-over-year decline in pricing and it's kilograms sol came in far below Wall Street's expectations adding insult to injury canopy's total operating expenses are growing faster than its sales for many investors this was a rude awakening cold water in the face taking over the Canadian cannabis industry turns that's gonna cost a lot of money then last Wednesday when we heard that Bruce Linton the founder co-ceo denim guest many times on Mad Money had resigned and when he caught in the squawk box he made credit he'd been terminated wow this was big news given the constellation brands has effectively controlled canopy says his big investment last year we went directly to the source CEO Bill Newlands he told us that the company today different leader to move one to the X phase the growth my takeaways the constellation ones candidate is seem like that's called more legitimate because it's continuing to expand into new areas especially health and medical products where you got to be more button now going forward then when someone will focus less on steelmaking and building a brand and focus more on execution ruslan didn't just get fired because he put up a bad quarter he got fired because some investors are finally beginning to pay a lot attention to the numbers he was a terrific founder an outstanding promoter and yes kind of a super great guy but the company wants to go in another direction and he couldn't pivot the way that they wanted to a lot of what's happened in the country when he give this guy credit with things that he said and did I don't mean something to be so tough on him bill no one's a very serious businessman and so's Linton but they're two different kinds and one's not working right now for this stock canopy so how do we evaluate the cannabis das going forward we don't want to hear about how many stores you got going to put up we want to know how your products are selling don't miss a second of bad money follow at Jim Cramer on Twitter have a question tweet Cramer hashtag mad tweets send Jim an email to Mad Money at CNBC calm or give us a call at one eight hundred seven forty three CNBC miss something head to Mad Money does CNBC calm you you you

3 Replies to “Paradigm shift in weed industry, says Jim Cramer

  1. Hmm I wonder if CNBC's doners include any big pharma, alcohol, or tabacco companies. … No wonder Cramer is so ignorant and against Cannabis, his payc heck is literally dictated by Cannabis' enemies.

  2. As it gets “legalized” in more states, more weed goes into production…the market is completely saturated ( turns out, not too many people smoke weed or want to). The entire industry is a complete liability…like when they get sued for the bad health effects…remember phillip morris…do you want to invest in the losing side of a multi trillion class action suit? Are you fking stupid? Nobody can tell you what the hell cbd does to the body or mind…the fda already says it does nothing good…this is a huge class action lawsuit in the making…

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