$9 Billion in Revenue and $2 Billion in Losses – Why the Marijuana Industry May Never Be Profitable for Investors

The other main problem the industry may never be able to overcome is, as Jeff Bezos put it so well, “your margins are my opportunity”.  Once the 280E tax breaks get worked through the system, and that cash bonanza gets dispursed, the industry will always face the unrelenting pressure of the illicit or black market.  As soon as prices start to get too high, where stores and brands start to increase margins, the illicit market will become that much more appealing for their lower prices.  If the legal industry tries to push prices too high, the black market will snag market share from more price conscious consumers.  There is a glass ceiling on how high the legal market will ever be able to raise their prices due to price pressures on the black market.