That is what i positioned for. Bear markets are better opportunities imho
1 Like
craft beer requires licensing, specialized facilities - big barriers to enter those markets. No such thing in hemp/cbd. any schmo can white label and start slanging cbd in a week.
You guys are confusing economy of scale with overhead. One doesnât necessarily depend on the other. Controlling expenses is far easier than controlling income. Of course there are diminishing returns to scale but opening the doors and turning the lights back on for a week of work at scale is a far better position than grinding all year on someones little hampster wheel for the same output.
2 Likes
Everything you say is true but it focuses on one aspect of the industry, one product. If you go crude to distillate all day every day, then yes, you are most likely going to get scaled out by larger businesses eventually. My point was that us little guys can move into other spots in this gigantic billion dollar market and still make a living. Itâll be ugly for the next year, sure. Poor operators who canât align their costs with the market will probably go out of business, no matter the size. Cannabis markets are in flux all the time. There is opportunity there for clever operators who know how to pivot into profitable areas. Good luck!
My hope is that the little guys dont hold their breath and wait for the circumstances to change back in their favor but to do exactly as you suggest and be clever in seeking new opportunity. The big guys are going to clean up in this mess. The little guys get to break new ground.
1 Like
Controlling expenses is very much a related factor in the diseconomy of scale.
1 Like
A good example of diseconomies of scale would be when too many chain retailers in a particular industry open up in a geographic area or when two locations of the same brand compete for the same customers because the branches are too close together. A given trade area and population can only sustain X amount of business in a particular industry. Above that, carry cost per unit goes up.
1 Like
100%
A multitude of factors cause it.
1 Like
I didnt use that term or mean it.
Economy of scale.
Yes, it definitely modulates the high, that can actually be a good thing, much more balanced, less potential for problemsâŚ
Sure, the retail side is way too flooded afa barrier to entry. But couldnât the same be said about processing facilities for hemp/cbd as far as licensing and specialized facilities? The guys making products for the ones requiring white label services and such?
2 Likes