As a legitimate business, cannabis is still very young, and even its biggest publicly traded companies have only been plying their trade for a short time.
As a result there are many myths and misconceptions about it. At the very top of the list is the one discussed by healthcare and cannabis bureau chief Corinne Cardina Jurney and Motley Fool contributor Eric Volkman in this video clip from Motley Fool Live recorded on Nov. 18.
Corinne Cardina: A viewer named R.G. asks, "What's the biggest misconception about cannabis?"
Eric Volkman: That's an interesting question.
Corinne Cardina: It is.
Eric Volkman: The biggest misconception about cannabis is that it's a multi-billion dollar market. I think it does have limits. Because it's still a very new industry, especially in this country, I think people get excited about it and they tend to overshoot as to their estimates as to how large the market is.
There is potential, but it's a landscape that's awfully crowded. There are lot of marijuana companies. A lot of small ones you've never heard of, a lot local operators that you wouldn't recognize if you saw them on the street. It's a market that has limits, it's also a market that has a lot of players.
It is an exciting time, yes, and there's growth to be had and there are profits to be made. But again, there are limits to it, and there should be limits to our frothing excitement
Corinne Cardina: I agree. I would say, my answer would be, don't underestimate the black market as many players as they are in the legal market. Canada has had a hard time really stealing that market share from the black market.
I think, as excited as we all get when there's new recreational states in the US, we like to say that we could see it becoming federally illegal maybe in three, five years time, we're still going to have to convince people to change their buying habits, which is probably easier said than done.
Eric Volkman: Yeah, and oftentimes, it's a real value proposition. I live in California. If you buy a certain kind of product [here], you can end up paying in the equivalent of about 40% of your purchase in taxes.
Corinne Cardina: Right.
Eric Volkman: That would give any consumer of anything pause to think, "why am I paying all this extra when my brother in-law is selling weed? I may as well just buy it from him."
Corinne Cardina: Exactly.