Wednesday, October 08, 2014

The Connection Between Warren Buffett Berkshire Hathaway and Marijuana

First it was chocolate, then it lead to marijuana. All investors know that Warren Buffett has had an outstanding return through his Berkshire Hathaway (BRK-A) (BRK-B), the highest priced American stock, which traded above $210,000 a share today.  Buffett's Berkshire owns a very diverse, and somewhat eclectic group of companies, everything from insurance, to engine oils, to underwear, to private jets, to ice cream, to newspapers.

One business that it owns is See's Candies, which is one of the best tasting candy manufacturers in the United States, using that "addictive ingredient" chocolate.  I normally don't eat candy, but I sometimes make an exception around the holidays with See's Candy. If you have never tasted it before, you need to try it at least once. Unfortunately, (or fortunately for the quality control), it is only available in 15 states.

So now what? According to an article in Bloomberg, Berkshire Hathaway is getting in to the marijuana cultivation business. Here is how they are doing it. Berkshire has a division called MiTek which has a subsidiary Cubic Designs, in the business of providing warehouse space platforms, is promoting its business to medical marijuana dispensaries, and even recreational marijuana dispensaries in Colorado and Washington. The company sent out approximately 1,000 flyers with a picture of a warehouse with mezzanine platforms with plants growing on them, emphasizing that growers can double the amount of space that can be available for growing plants.

Will the marijuana industry add a lot to Berkshire's bottom line? No. Will it help boost the price of Berkshire to a million dollars a share? No. But what this business does do is add a little more legitimacy to the marijuana growing industry.

The latest stocks in the Berkshire Hathaway portfolio are in less exciting industries. One of the companies is in the pipe business, not the kind you smoke but the ones used to transport oil and gas. The company is Now Inc. (DNOW). The other is in the cable television business, Charter Communications (CHTR).

You can find all the Warren Buffett stocks at Yet, the best way to invest like Warren Buffett is through the Berkshire B shares (BRK-B), which sells for less than $150 a share.

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