Somewhat off topic here, but does anyone here follow VIT at all?
Cronos Group hold ~10% of VIT and have recently made moves by securing large scale supply agreements to Aus. Cronos is held in majorly Altria Group (41% of holdings, next largest is 2%. Altria Group is the parent company of Philip Morris (One of the worlds largest tobacco manufacturers globally). Directly or Indirectly, Phillip Morris holds interest in a company exporting Cannabis products to Australia, with the recipient being VIT.
I would be curious to know what rates they are importing at, what sort of margins they charge on their products. It’s quite intimidating seeing this.
For those familiar with the ‘Power Rule’, we generally only see the top 20% of businesses in any industry flourish and grow exponentially. VIT importing may limit our competitiveness against.
But, from every negative comes a positive. Phillip Morris are well known for their lobbying. They now have a strong financial incentive for both the US and Australia to increase Cannabis sales and production. I believe that they are positioning themselves for the moment when cigarettes inevitably are either phased out and lose substantial market share or become further regulated. (We know that the tax revenue from Smoking is multiples times lower than the public health spend on chronic disease management, loss of life and loss of productivity, etc). There will be strong lobbying on behalf of Cannabis from very powerful Tobacco forces. I’m a political skeptic, but every time big shifts happen in markets, those with wealth and power, and those with access to decision makers, are ultimately the ones who profit. Why bother picking a trend when you can start one?
So, for VIT, Cronos and Phillip Morris… what is their next move? Lobbying positions to increase Cannabis demand in Australia? Perhaps incentivise GP referrals of CBD/THC products to increase sales? How about persuading our government to place Cannabis products on the PBS (The number of people who have started therapy and are unable to afford chronic pain management without opioids is increasing). Anyway, big forces at play here. Massive swings in politics based on legislation. Big things coming, it’s a slow grind but there’s clear momentum building in the right direction.
addit: British America Tobacco also making massive moves in Cannabis. This barely scrapes the surface. Apologies for conspiracy views in this, just my thoughts.
ECS Price at posting:
2.5¢ Sentiment: Buy Disclosure: Held
