if cannabis Prices have risen significantly, do you blame inflation or corporate greed? Or are these two sides of the same coin?
If inflation and corporate greed are two sides of the same coin, it must be a very big coin. It’s as if you were saying that the United States is located in the Milky Way.
Technically, you are not wrong. But there is clearly more.
Almost every problem that society faces is either a product of (or exacerbated by) the greed of the common state. Bloodshed, their desire for power, their sociopathy.
Nowhere is this greed more evident than in the monetary system.
Since barter gave way to exchange, people wanted to control the means. Controlling money is controlling people.
Is hemp inflation the product of a partial reserve bank or corporate greed?
Is the United States located on Earth or in the Milky Way?
What is hemp hypertrophy? Corporate greed, really?
Cannabis prices do not appear to be rising. if something happens, A boom caused by an epidemic In self-correction mode. Cannabis prices have decreased or remained stable.
But the question “what is cannabis hypertrophy?” It is at the heart of inflation.
Left-wing political leaders denounce “corporate greed” over price hikes. By this they mean: “The rich raise prices to make more profits. The rich are bad.”
In their minds, the market is a zero-sum game. The only way to win is to get away from someone else. This is usually phrased as ‘stealing’ by wealthy employers the surplus value from poor workers.
It’s the economic equivalent of believing the Earth is flat because the horizon doesn’t look curved.
So, if or when cannabis prices start to rise. Would you blame systemic theft out of courtesy to companies and the state? Or the owners and growers of cannabis companies?
How does profit and loss work?
The cannabis company, like all companies, sets its prices to earn a profit that exceeds the cost of labor and materials.
Technically, this is not a profit but a return on investment. Owners take more capital home than workers because the owners have to pay the costs. Workers are still paid for their time if the cannabis company loses money or goes bankrupt.
In a free and competitive market, this return on investment is fairly uniform across the board, by sector.
Profit, in the truest sense of the word, is an arbitrage opportunity offered by inconsistencies in the market. If you can spot them, you can make a lot of money.
This is so competitors take notice and adapt.
As an example, imagine a free market for cannabis. Across the board, edible manufacturers tend to deliver the same return on investment.
But let’s say, perhaps from looking at the data or with real intuition, that you predict that a sugar-free watermelon-flavored dessert will be very popular next summer.
So you, as an entrepreneur, act on that prediction, and when summer comes, the results speak for themselves.
You sell a lot, you make a lot of profit, and by the time your other competitors to eat can bring their watermelon-flavored gum up to your level, summer is already over, and the trend is starting to wane.
The money you make at the beginning of the summer exceeds the usual return on investment. It is a real profit.
You can see what happens if the market is not competitive. Rules and restrictions that benefit the corporate elite at the expense of small businesses will lead to profitable opportunities for some but not others.
The problem is not so much “corporate greed” as an unfair market.
It is as if you are playing Monopoly with a group of friends. But one player is strict with the banker and does not play by the rules.
Greed is not real
Can corporate greed afflict? cannabis industry? Isn’t it already? Linking inflation to corporate greed is due to a misunderstanding of economics.
Left-wing demagogues using “Greed” as an audio story see your friend colluding with the banker in this Monopoly game. But instead of calling them out, they’re jealous that they’re not part of the agreement.
With corporate pressure, the market rewards more focus and lower competition. Government laws reward companies that earn more and pay workers less.
This trend has nothing to do with inflation.
inflation in cannabis industry Or any other sector that results from chasing too much money for too few goods.
Consider a Canadian grocery store chain metro.
The Montreal-based company reported net profit of $207.7 million in the fourth quarter of 2021. Sales rose 7.1 percent.
For Canada’s left-wing demagogues, Metro has unnecessarily raised their prices and it’s profiting the difference. In their simplified analysis, that money rightfully belongs to the consumer.
But the company’s success results from sales, margins, and expenses.
Expenses are higher because energy prices are higher. But the subway’s margins remained the same. The average grocery store profit margin is 2.2 percent.
But this is really very complicated. It’s easiest to point to the horizon and say, “I don’t see a curve.”
Cannabis bloat: corporate greed?
So what causes inflation? If cannabis inflation is caused by corporate greed, how will that work?
Consider Canada great Licensed Producers It can affect the price of hemp. But they can’t raise cannabis prices in general.
Perhaps, if, say, Canopy succeeded in bypassing every small LP and buying up every significant competitor, then it could drive up cannabis prices to unreasonable levels.
But all these means is that cannabis consumers in Canada will have less to spend on other goods. Prices will not rise in other sectors.
Canopy would be engaged in price manipulation, not inflation.
And what is stopping other cannabis producers from entering the field and competing with Canopy to bring prices back in line with market preferences? (other than costly regulation imposed by governments).
Inflation, whether it’s in the cannabis industry or the groceries, is caused by central banks.
They engage in “open market operations”, where they buy bonds from large institutional banks (the ones you’d find on Wall Street or Bay Street).
Now, do central banks buy these bonds with their gold reserves? of course not. The Bank of Canada, for example, has no gold.
Do central banks even debit their accounts when they lend to institutional banks? of course not. This would defeat the purpose.
The central bank exists to print money. To add numerical numbers to the balance sheet. This is how they control interest rates as if they were formulating “public policy” rather than destructive intervention in a market economy.
Subsequently, the major banks engage in a partial reserve bank, which leads to an increase in the hierarchy of the money supply.
And when you increase the money supply, its price in terms of other goods will fall. In other words, money loses its purchasing power – the prices of goods and services increase.
Banks create inflation. You can call that corporate greed, but like I said, that’s like saying the United States in the Milky Way.
Technically true, but saying it out loud tells us more about your intelligence than you think.
There is no such thing as inflation when we have market-based money, like gold, silver, bitcoin, or retail coin. Just a criminal act of counterfeiting money.