9/29/2018 The Week Staff The Week Magazine   Share to Facebook  Share on Google+  

Legal marijuana: A bubble about to burst?

Legal marijuana: A bubble about to burst?The legal marijuana industry has gotten high on fantasies of massive growth, said Jordan Weissmann at Slate. Stocks of firms connected with the cannabis business have been "ripping higher" this year, a sign that the market might be suffering from "reefer madness." Just look at Tilray, an obscure Canadian medical marijuana producer that was briefly worth $20 billion last week about the same as the 124-year-old Hershey's. Tilray's stock rocketed after the firm announced that the U.S. DEA had granted it permission to export plants to the U.S. for medical research. CEO Brendan Kennedy then appeared on CNBC's Mad Money and pledged to viewers that legal marijuana would soon be a $100 billion industry. But Tilray is still a tiny, money-losing company and the DEA granted it the right to provide weed only for a single clinical trial involving 16 patients. Tilray is simply "the most extreme example of the froth foaming all over the marijuana sector." Legal-weed executives are boasting that the industry is going to be so big, it doesn't matter how little money their businesses are earning today or that marijuana is still illegal under federal law. "That's classic bubble talk." Boosters argue that the nascent marijuana industry is "like the internet in 1997," said Jacquie McNish and Vipal Monga at The Wall Street Journal. The action is so hot that bankers are quitting Wall Street jobs to join up. The center of the gold rush is Canada, which will start allowing sales of recreational weed in

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