What role does the ESG “woke” cartel play in the cannabis industry?
Therefore, the Environmental Social Governance (ESG) woke cartel has come to save the day. People like growing and consuming cannabis. We can’t have that!
Instead of measuring success based on happy customers and growing profit margins, proponents of ESG say business owners must weigh the cannabis industry’s success against environmental, social, and governing aspects.
But, as Elon Musk correctly tweeted, “ESG is a scam.”
ESG Investing vs. Common Sense
Environmental, social governance (ESG) investing is a type of activist index fund the cannabis industry should avoid like the plague.
Traditionally, you assess a company’s viability with balance sheets, cash-flow statements, income statements, shareholders’ equity statements, etc.
Typically you calculate ratios to give you a glimpse of the business’s financial health.
A debt-to-equity ratio indicates the proportion of equity and debt used to finance the company’s assets.
A cash asset ratio that compares current assets with liabilities. A return on equity is the net income return as a percentage of shareholder equity.
Or net profit margin. This one indicates the business’s efficiency in controlling costs. A higher net profit margin shows more efficiency in converting revenue into actual profit.
A lot of people struggle with these concepts. Or they remain entirely ignorant of them. And not just your average joe.
Consider political leaders who have been blaming inflation on “corporate greed.” Major grocery store chains are reporting record profits. This has left-leaning demagogues calling for a wealth tax.
But if you look beyond the headlines, you’ll see that net profit margins are either the same or, in some cases, less.
Or, take Canada’s licensed producers of cannabis. How many are cash-flow positive?
There’s more to the complex capitalist economy than just “profit and loss.” Yet critics of capitalism don’t usually think through the problem this far.
This leads us to environmental, social governance investing, or ESG.
What is the ESG Investing?
The cannabis industry would be wise to avoid ESG-centric investing if it can.
Like labour unions reducing productivity in pursuit of political goals, a situation where ESG investing becomes mandatory is problematic.
Suddenly, the financial health of a business isn’t dependent on whether they serve consumers effectively but rather on the standards set by politicians.
The Environmental, Social, and Governance Index is a Chinese-style social credit score for corporations.
Many might cheer on that “we” are policing corporations. But this is a simplistic reading that doesn’t require anything beyond surface-level analysis.
ESG has one goal: to create a woke cartel.
Like how governments divided citizens with domestic covid vaccine passports, ESG aims to split the cannabis industry into two.
There will be those who go along with the woke demands of ESG. And then, some will prefer to run their business based on their customers’ input.
Of course, just like how you couldn’t perform basic activities without a vax-pass, cannabis companies not complying with ESG will find investment dry up.
It’ll be harder to do business when you’re a “noncompliant.”
Proof ESG is a Scam
Who is this ESG woke cartel? And why is it a scam for everyone, not just the cannabis industry?
Take Elon Musk, for example. He pulled Tesla from the S&P 500’s ESG Index earlier this year.
Tesla has produced more electrical vehicles people want to buy and drive than any other car manufacturer.
That should have ranked Tesla at #1 in the ESG index, right?
No, Exxon Mobil ranks higher than Tesla, as does JP Morgan, the world’s largest investor in oil producers.
Why did Tesla rank lower than literal greenhouse gas producers and investors?
Apparently, it had to do with Tesla’s carbon strategy and codes of conduct. Tesla didn’t have a “low carbon strategy.” Which is seemingly more important than actually producing lower tons of carbon.
As well, Tesla suffered from claims of racial discrimination and poor working conditions at its Fremont factory.
Now, no one is saying these aren’t issues that should or shouldn’t affect the bottom line. But who decides? The buying public? Or an ESG index run by corporations and global technocrats at the World Economic Forum?
ESG is a political spectacle. It’s meant to separate the woke from the non-woke. And since calling out the covid lockdowns as the fascist policies they are, Elon Musk has been in the “non-woke” category.
BlackRock & Vanguard: Should the Cannabis Industry be Worried about ESG?
BlackRock is the world’s largest asset manager, and Vanguard comes in second. Both are behind what they call “stakeholder capitalism,” a belief that companies should benefit “stakeholders,” instead of their shareholders.
In his “2021 Letter to CEOs,” BlackRock’s CEO, Larry Fink, declared that “climate risk is investment risk.”
“The creation of sustainable index investments has enabled a massive acceleration of capital towards companies better prepared to address climate risk.
“And because this will have such a dramatic impact on how capital is allocated, every management team and board will need to consider how this will impact their company’s stock.”
Or, as World Economic Forum founder and chairman Klaus Schwab put it: “Every country, from the United States to China, must participate, and every industry, from oil and gas to tech, must be transformed. In short, we need a ‘Great Reset’ of capitalism.”
Or, to quote Fink, “It is not a social or ideological agenda. It is not ‘woke.’ It is capitalism.”
But this is very clearly corporatism, also known as economic fascism. A handful of large companies coordinate production and special interest groups dictate society’s norms.
Corporate power combines with the power of the state to push for ideological agendas. In this case, they are dismantling small businesses and creating a social credit system.
The end result will be a further concentration of corporate power, fewer individual freedoms, and a lot more propaganda about how your suffering is good for the planet.
Yes, the cannabis industry should be worried about ESG. ESG isn’t some future hypothetical. It’s already here.
Cannabis Industry already infected by ESG
You don’t have to go far to find the cannabis industry already infected by ESG-centric ideas.
Canadian company HEXO has publicly stated they want to be carbon neutral. Same with edible maker Wyld, who wants to produce biodegradable packaging.
Now, this sounds fine. And in many cases, it is. Justin Trudeau’s legalization has created so much plastic waste. If someone gave his government an honest ESG score, it would have to be in the negatives.
But, of course, that’s not how ESG works.
Cannabis company Trulieve has a dedicated ESG report. They even have an ESG board committee and flaunt their “Diversity, Inclusion and Equity” commitments.
Cannabis companies are jumping into the ESG world without thoroughly understanding its meaning.
On one side, you’ll lose the autonomy of your business to unelected bureaucrats and corporate asset managers.
On the other side, you’ll lose customers. “Get woke, go broke,” is a mantra repeatedly being proved true.
Cannabis consumers want quality cannabis. Only racists care about the skin colour or ethnicity of the grower or budtender.
ESG is an index to measure compliance with the world elite.
And some take the propaganda at its word. That ESG is about climate change. That those who disagree with Schwab and the WEF are “far-right extremists.”
These people are in for a rude awakening.