Thanks @Chagsy a good listen. The Economist is an excellent publication with great depth especially into politics and business. Although they made it VERY difficult for me to cancel my hard copy subscription.

My takeaways from that pod were the US cannabis industry is very fragmented along state boundaries with big differences between the states. The examples given in the pod were Michigan which has some of the biggest producers in the country have a very competitive market with an open licence structure and lower prices. Whereas in Illinois they have restrictive regulation and tend to have high end and a more expensive product. They estimated that in California where cannabis is legal about 2 in 3 transactions and illegal. However in Colorado, who were an early mover in legalising cannabis they have a more effective collection of tax and a more effective legal industry. There seems to be a pattern of states making it legal and then sort out the legislation as the problems arise. The parallels with the gambling industry were interesting.

Their discussion on how would US federal legalisation change the industry was interesting. They suggested that as state boarders open up there would be huge consolidation with a small number of big winners that take all.

A little company like LGP is in a space with big competition. Not only with other listed and unlisted companies but the illicit competition as well. The difference between Australia and New York is we don't have illegal shops selling cannabis. That happens at old mates house or down at the pub! At the moment LGP are operating in a well regulated rules based space that is encouraging medicinal grade product as it is a prescription only in Australia. Perhaps other countries will travel down the same road as Australia and convert its illicit cannabis users to prescription users - like France are planning where LGP have a foot in the door.

There are of course lots problems. Can LGP maintain and build a strong enough brand to out-compete the large number of players? Will brand even matter in the end if the whole industry becomes commoditised and the cheap African and South American producers crush the rest of the market? It's hard to see how it will play out in the future especially when legalisation eventually hits.

However in the meantime there will be opportunities. In an industry bloated with corporate failures there should be some gems hidden in amongst the ruins but I can see why most people put this in the too hard/too risky basket.

Please let me know if you come across anything else interesting like this!