Cannabis / Marijuana, STAFF NEWS & ANALYSIS
The Invisible Hand Cultivates Cannabis
By Staff News & Analysis - September 15, 2014

Warren Buffett's company subsidiary is marketing pot-growing spaces … Talk about savvy marketing. Cubic Designs Inc., a subsidiary of Warren Buffett's Berkshire Hathaway Inc., has sent hundreds of fliers to weed dispensaries in Colorado, Washington, and California. "Double your growing space," one flier reads in capital letters, while another page adds, "Grow your profits." – The Week

Dominant Social Theme: Here's a good business opportunity. Capitalism comes to cannabis.

Free-Market Analysis: This was predictable. Buffett is finally making a move.

What's a little puzzling is why he waited so long. But it had to come. We've already predicted that the industry is going to see corporate participation and sooner than later. Industrial giants are all going to want to operate in this space. Cannabis is the profit-opportunity of the 21st century, for sure.

Smaller firms will cash out and make a killing. Larger companies will rationalize the sector and create the usual mercantilist/regulatory structures that will benefit the biggest while constraining entrepreneurial activity.

All that is in the future, though. Right now the cannabis business is still in its infancy. Thus, we'll see the beginnings of participation from people like Buffett – but nothing overwhelming. Not yet, anyway, though there are probably plans afoot …

Here's more:

Cubic Designs builds additional platforms in warehouse spaces, allowing companies to expand usable areas of their holdings. A couple of marijuana growers independently contacted the company, inquiring about the "mezzanine systems." So, "we sold a few mezzanines into that market and decided internally, 'Why don't we do some marketing?'" Shannon Salchert, marketing coordinator for Cubic Designs, said.

Contacting growers has been difficult because growing pot is "still secretive," Salchert notes, so the company has instead left the fliers at dispensaries. Warren Buffet did not respond to an interview request from Bloomberg Businessweek, but the 84-year-old billionaire is reportedly known for giving his company's offshoots a large amount of autonomy when it comes to operational decisions.

Cannabis as an industry has a long way to go to mature. But Buffett probably can't resist some minimal involvement. Perhaps he is aware that other corporate food giants are stirring as well.

Cargill is one such, as is Monsanto. Back in December 2013, we predicted that Monsanto would utilize Uruguay's cannabis legalization to take a foothold in that small country. We wrote:

Monsanto, under attack regarding its GMO seeds, may need a new market to re-establish credibility and even popularity – as marijuana will surely prove a more welcome crop than soy in the public mind. Monsanto's efforts as regards marijuana in Uruguay may be helped by the overwhelming government involvement in the cultivation, sales and marketing of marijuana. Monsanto Marijuana Initiative Grows in Uruguay?

And now we see this, from MarketWatch:

Monsanto and billionaire investor George Soros have gotten their hands dirty and pushed to get into the marijuana business. Now that Uraguay became the first country to legalize the production and sale of marijuana, Monsanto plans to launch production of genetically modified marijuana. Analysts are pondering if marijuana will become the next GMO (genetically modified organisms) crop, with patentable transgenic strains developed with increased active compounds for use in drugs.

With its talent at bending smaller governments to its will, Monsanto may find a significant opportunity in Uruguay to establish an even more aggressive business beachhead. There is no doubt that the Uruguayan government will dominate marijuana production, at least in the short term.

How did we know enough to predict this? We didn't. We only knew that Soros and Monsanto are mercantile opportunists and that Uruguay would probably provide fertile soil for potential cannabis initiatives. Cargill is already a big presence in Uruguay, and no doubt Monsanto will leverage its relationships with such corporate colleagues.

Again, we're only at the beginning of this cannabis corporate emergence. In fact, Buffett's company hasn't fully figured it out. The real action regarding cannabis cultivation is going to take place in Latin America … and out of doors. Buffett's initiative is an indoor one.

We can certainly see the day when vast cannabis plantations spread throughout the warmer parts of South and Central America, mimicking the banana and pineapple plantations that have become part of the lore about the history of the continent.

After Thoughts

Buffett's emergence is just the beginning. This is going to be a long and profitable ride, with plenty of controversy and confrontation as well.

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Posted in Cannabis / Marijuana, STAFF NEWS & ANALYSIS
  • Cannabis is very easy to grow. Individuals can easily grow all their medical, or recreational, needs on a very small garden with not much more effort than growing a lawn. It is hard to imagine large plantations of marijuana being grown around the world. Certainly, GMO marijuana will be rejected by most people. There is no need for GMO marijuana. Cannabis has its own pesticide and insecticide resistance built into it by nature. Cannabis is a weed. Short term a lot of money will be made. Long term seems like the opportunity will be diluted.

    Industrial hemp, on the other hand, has great possibilities. Clothing, batteries, construction materials, paper, plastics, fuel, and a whole variety of products made from hemp are far superior in quality to petroleum based products.

    Building with Hemp Part 1/2

    • It is one plant, regardless.

      • And a very good plant indeed. A great investment.

        I raised six industrial hemp plants this year (the legal limit without reporting to the authorities) and I believe, and it still needs to be confirmed, that Colorado planted over 1000 acres of hemp this year, compared to 60 acres last year. My plants were strong with not very much work involved. We topped the plants, at regular intervals, to make them bush out and produce more seeds. Seeds were hard to come by this year. I expect many more acres of hemp in Colorado next year. Industrial hemp, medical, and recreational cannabis is the future. A simple search on the medical benefits of medical marijuana produce some surprising links.

        Ben Swann is going to post a video in the very near future about CBD oil and Cannabis. I am looking forward to his report.

    • Bill Ross

      Agree, it will be “pump and dump”, for investors, a matter of timing until the absurdity of “can consume, cannot grow unless approved” translates to widespread defiance and the ubiquity of natures bounty being, as it should be, beyond control / monopolization.

  • Bill Ross

    The invisible hand has and always will DO whatever sums to perceived collective survival interests. Some individual innovator / group will chart the course (lead) and, the rest of “monkey see, monkey do” humanity will follow:

    • Why would you presume that a segregative and private agenda would operate in alignment with anyone else’s or any collective survival interest?
      The positive or integrated consciousness operates the invisible hand of a win win collective – but the negative or segregating consciousness operates a fundamental dis-integrity that operates as elitism, exceptionalism, and hidden private agenda.

      IT MAY WELL PROVE TRUE that the negative identification brings the collective to breakdown, and catastrophe or indeed unbearable mechanical slavery in which consciousness seeks to hide in even denser and darker forms of denial. And this becomes the perfect conditions for awakening from a ‘game that is no longer worth the candle’.

      Many positive and effective opportunities are blocked off, invalidated or subverted so as to maintain a racketeer mentality.

      This consciousness is reflected in the collective because its alternative is not chosen. A deceit operating in darkness maintains a condition of fear and guilt whereby to remain a power of manipulative exploitation.

      As for corporate profits etc – don’t you feel that any residual life energy that can be fracked out of any remaining relational system will be broken into so as to feed the ongoing addiction that results in the evaporation of wealth into cash?

      • Bill Ross

        “Why would you presume”

        Not “presume”, conclude.

        Because, we all want to survive and, predatory behavior (whether you are predator or prey) interferes with peace and division of labor (civilization).

        If prey, well defending from predators interferes with your resources /motivation to be productive.
        If predator, well, defending from your victims will rapidly consume “proceeds of crime”, in defense.

        Or, as stated by the gipper: What cannot go on, won’t.

        • A parasitic mentality uses its host – usurping the functions of its host and then discards it when exhausted. With the ‘death’ of the host comes a ripeness of seeding itself anew. It doesn’t know anything BUT survival amidst threatened existence. It believes that is the only reality and therefore it alone must survive and assert its will for its own satisfaction. Rationality is only a tool of expedience for such a sense of disconnected identity.

          If only a very select group intends to survive so as to then dominate all others, no values of the civilisation of ‘others’ are given more than lip service while disguise is expedient. After the old order is completely usurped or undermined, the NWO will then be a reflection of their power and others compliance.

          Whilst direct predation kills and consumes prey, or attempt to neutralize rivals, the domestication and manipulation of others as a herd operates within the veneer of civilisation – that is as a masked agenda of deception.

          When your victims are so split mindedly conditioned as to fight themselves and each other rather than you, you can use selected proxies to rule overtly. If some of them have to be sacrificed – so what, when you also own the opposition?

          I am not saying there are not alternative ways to live than the enslavement of the will to power and the corresponding abnegation of power that feeds it – but I feel your take somewhat superficial and hugely optimistic in terms of your sense of ‘victims’ capacity to identify and act effectively.

  • Praetor

    I have always wondered where Warren Buffett got his inspiration from. Now we know. Sky, HighTimes profits for a while anyway, for the little guy. In door operations will probably be the future, more secure, lots of people walking around just picking at your profits and undercutting the legal stores sales. Just like moonshiners did, after prohibition, the government will need a lot of new revenue officers, to chase down the new moonbud sellers, to stifle illegal operations and any and all competition. Bye, Bye government tax revenue profits, lost, within the bureaucracy, AGAIN! Potheads, you made the mistake of letting government tell you how things are going to be. Maybe, smoken’ the weed will help you see, government is a no, no!

  • gomurr

    We knew this was coming. Let the greed begin.

    Since cannabis in it’s natural form is being proven to cure a myriad of disease (our government has known since 1973 it cured cancer, but chose to bury that info to the delight of their friends in the chemo business and big charitable fundraising organizations like the ACS), and since industrial hemp has literally hundreds, if not thousands of applications, the last thing we need is GM marijuana. Somehow, I see this as turning a gift from God into a plant from hell. My opinion, of course, but a valid one based on my own research.

    For those afraid they might get high (God forbid!), it isn’t the THC curing disease, but the cannabinoids, so nothing to worry about. Besides, in it’s unaltered state (raw), even the THC content is nonactive.

    If there’s a way to make a good thing bad, and make a lot of money while doing it, I’d bet on Monsanto every time.