Too Big To Fail?

bozz(82)

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In case I didn't make it clear in some of my other posts, I live in Michigan. It's a pretty awesome state with a lot of natural beauty and all kinds of other cool things going for it. If you ever get the chance to visit, I highly recommend it!

For several years Michigan law had allowed marijuana for medical use only. It was kind of silly, because there really weren't any super strict restrictions keeping you from getting your medical card. All it took was knowing which doctor to go to and knowing the right things to say. After a few years of that, Michigan eventually decided to take a vote and eventually recreational use was legal at the state level.

During the medicinal days, it wasn't uncommon to find a mass of dispensaries in a specific geographic area where they were allowed. However, after the recreational market opened up, we suddenly saw a massive influx of grow, production, and dispensing buildings. All of this was pushed down to a local level, so if your township didn't allow it, you were basically free from it. However, if your township residents voted to allow it, you likely saw the landscape of your area drastically changed.

In areas where grow operations were allowed, farm fields were sold off at insane prices per acre and large buildings were quickly erected to house the grow operation. Permit money was flowing into those townships like water and everyone was pretty happy. I forgot to mention, along with the grow operation, residents of the state are able to have up to 12 plants of their own that they can grow themselves.

Anyway, near where @mrsbozz and I live, there was a large company called Pincanna. They had a huge grow and processing facility along with several other dispensaries throughout the state. My brother in law did a tour of their main facility when they were first opening and he said they had huge underground vaults ready to store money since they weren't able to keep it in a regular bank. You see, although marijuana is legal at the state level, it is still a schedule 1 narcotic at the federal level, so any federally backed bank would not be able to do business with them.

Anyway, my wife and I were driving around the other day and we happened to notice that the large Pincanna facility is now completely shut down and up for sale. We reached out to someone from the area that we know and she said that they had went bankrupt.

The state recently introduced a pretty healthy tax hike on legal marijuana sales, but I don't think that has much to do with them going out of business. Personally, I think what happened is they tried to grow too big too quickly. I also think they probably didn't anticipate how much competition there was going to be. Yes, townships are only going to be allowed to hand out a certain number of permits, but within a couple mile vicinity of Pincanna are at least three or four other operations.

Although the market is still relatively new in this area, I think it is oversaturated and that is why we are seeing many of these businesses shut down. It's kind of sad though because now this huge facility is just sitting there empty. After all the money they put into beefing up the power grid and creating this space, it's almost sickening to see.

In Other News

With BTC hovering around $100,000 per token, I thought it might be fun to take a break from my regular Friday Finance post this week. There just isn't too much to get excited about right now. HIVE is struggling, most alts are languishing. I saw something yesterday that some big news was coming that would boost the crypto markets, but that seems to have just been wishful thinking.

While the overall view for crypto is still looking okay (especially if you bought in sub $10,000), I'm pretty happy that I never gave up on my traditional investments right now. They might not be pulling in crazy returns, but they are just chugging along doing what they have been doing for close to 20 years now.

A steady 8 to 12 percent gain each year is nothing to complain about. I'm hopefully building up a pretty healthy nest egg that will carry me through my life after work. Now that we are in November, I am starting to look forward to seeing what my capital gains and dividends end up being for my investments at the end of the year. I will be sure to share the news with you when I get it.

Seeking Silver

I've been hemming and hawing for quite a while, but I think I am finally going to get around and make my silver purchases for my family Christmas. I know, I keep saying that and then I don't do it, but with silver holding right around $48 an ounce, the time sort of feels right now.

The good news is, with the higher price of silver, I am likely going to spend enough that I can get free shipping this year...

I guess it's a good idea to see the silver lining where you can (pun intended).

The Pub

The Pub is bustling over on Discord. I'd like to see a bit more activity in the HIVE community, so if you are interested in finding a place to post your high quality content, feel free to check out The Pub community. You an find the information in my signature at the bottom of this post.

Here's hoping the rest of November goes better than what we have seen so far...