By Franklin Jay, Editor-in-Chief, ProfitableNews.com
Like it or not, marijuana legalization is taking over the world.
Maybe you’ve noticed medical dispensaries popping up in your hometown. If not, you can bet you will soon.
Because legal marijuana is now a $150 billion global business.
That's bigger than the world’s corn market.
Think about that for a second.
And now that Canada's Bill C-45, the Cannabis Act, has been ratified officially, the profit potential is about to go absolutely nuclear.
This act legalizes medicinal and recreational marijuana throughout Canada – the first G7 country to do so. It’s on track to be implemented fully by October.
And, practically overnight, a $400 million market will become a $22 BILLION dollar market, according to Deloitte.
But even that is just a drop in the bucket…
Because I believe that this move will be the final straw that forces the issue in a much larger market…
The United States.
Legal marijuana in the United States – unheard of just 10 years ago – now has gained the approval of 64% of Americans. For now, though, it’s only legal at a state level. Around 30 states, at last count.
The federal government’s official stance is still that marijuana is a Schedule 1 drug. But lately they’re doing very little to enforce the law.
It’s a ridiculous policy anyway. One that I believe is 12 months away from getting overturned – with bipartisan support, no less.
Personally, I can get behind darn near anything that keeps the government out the daily life of citizens.
But this is not a personal liberty issue. No, the thing that’s going to force change in the U.S. is – what else? – money.
When you’re talking about a market of this size… you darn well better have a piece. Otherwise don’t call yourself a serious economic power.
Yes, I’m looking at you, United States Congress.
That goes for investors too. If you’re serious, you’re putting down some money in this sector NOW.
Look, I won’t waste your time regurgitating the data points that prove that medical and recreational cannabis are exploding. You can find all that in the mainstream news.
I’m skipping straight to what you’re here for.
The Easiest Way to Make Money in the Cannabis Boom
There are 200 publicly traded companies in the marijuana space. About 70 of them are in Canada, and the rest are U.S.-based. The problem is, they're almost all OTC penny stocks, they’re alarmingly volatile, and most will fizzle out in a mad rush of red and investor lawsuits before this is over.
Now if you want to stick your capital in an ETF and call it a day, you have three fine options. I’ve listed them below.
Of course, if you go the ETF route…
Your risk isn’t necessarily less. Actually, it’s all concentrated in the sector…
And you’re pretty much guaranteed to miss all the fun.
|ETF||Ticker||Description||AUM||Expense Ratio||5 Biggest Holdings|
|Horizons Marijuana Life Sciences ETF||TSX: HMMJ||Seeks to replicate the North American Marijuana Index||$680 million||0.75%||ACBFF, WEED, GWPH, LEAF, SMG|
|ETFMG Alternative Harvest ETF||NYSE: MJ||Seeks to replicate the Prime Alternative Harvest Index||$370 million||0.75%||GWPH, LEAF, THCX, CBW, WEED|
|AdvisorShares Vice ETF||Nasdaq: ACT||Actively managed fund with holdings in alcohol and tobacco as well as marijuana||$12.6 million||0.75%||STZ, MGPI, SAM, ABBV, BF/B|
Secrets of the Experts
We checked in with Ray Blanco, the whiz behind Technology Profits Daily. He's always got an interesting take.
And Blanco is telling his readers to milk this opportunity for all it’s worth and go all penny stocks, all the way.
There’s an implicit advantage to this approach for us little guys. Big investment firms really can’t trade these stocks. They’re simply too small. So penny stock companies in the pot business are underreported and off-the-radar. There are some absolute gems in the biotech space, and a few that could become the next big retailer of pot.
Here’s what’s really appealing about Blanco’s approach…
He admits outright that it’s still too early to know which companies will be successful in the long run. There’s too much uncertainty in this early market. Policy still has a strong hold on what happens, especially at a state level, and we should expect consolidation in the sector. Only the strong will survive.
But since this is a moment for the bold…
Blanco recommends scooping up a handful of strong contenders at their cheap prices, both from the U.S. exchanges and Toronto.
It's a gamble. But with penny stocks, you don't have much to lose.
Blanco has stated that he believes a single $50 stake in select tiny stocks can turn into a massive fortune from the legalization boom.
If that kind of high-risk, high-reward approach resonates with you, check out his video presentation here:
Meanwhile, Nick Giambruno, Doug Casey’s right-hand man over at The Casey Report, is just as excited about what he calls “the early innings of a mega bull market.” This is a man who lives for research. I'm always impressed by the depth of his work. He’s found some hot opportunities on the Toronto Exchange with growers and suppliers.
But when it comes to U.S.-listed stocks, Giambruno won’t touch any business that “touches the plant.”
Instead, he’s going hard after companies that supply essential products and services to the booming industry. Things like equipment for growing and harvesting, special lights and hydroponic essentials, cannabis smoking accessories, etc.
Giambruno insists keeping your investment dollars one step removed from the actual plant is key. And again, it comes down to money.
He points out that no U.S. bank will do business with a company that deals directly with the marijuana plant. Not until the federal government legalizes marijuana completely, and not until that policy has been fully enacted and looks to stay that way.
Obviously, we’re not there yet. (That’s part of why the opportunity is so ripe.)
Instead, he’s found a good number of “picks and shovels” plays in the U.S. They are 100% legal under federal law, no matter what happens.
I have a feeling the folks at Casey see this field as too risky for inexperienced investors right now. They’re playing it safe, and they’re doing right by their readers, and that’s fine.
But if speculation is more your cup of tea…
You’ll love what Michael Robinson of The Nova-X Report has cooked up.
Michael, by the way, was one of the first in the newsletter space to officially recommend buying Bitcoin, way back in 2013. It was below $100 at the time, and over $9,000 at the moment, so you do the math…
And apparently he’s still comfortable making the kind of calls that make 1,000% or more gains for his followers. Even when they’re unpopular… at first.
He’s singled out several hot microcaps for the pot sector – and I mean micro. Again, they're a gamble.
But there’s one company he dug up that I almost couldn't believe.
This Is Our No. 1 Pot Stock Pick for 2018
Cronos Group Inc. (CRON) is a remarkable holding company based in Toronto but listed on the Nasdaq – in fact, earning the distinction of becoming the first Nasdaq-listed pot company earlier this year. (Most of the rest are still toiling away on the Pink Sheets – a tough place for a little company to get traction in the public markets.)
It’s not the biggest pot company in the world. At $1.56 billion, it’s not even the biggest one in Canada.
And it isn’t tiptoeing around the edges with picks and shovels…
It’s down there in the mud with the growers, where the serious profits will be when demand explodes overnight this summer.
And its production capacity is expanding FAST.
Cronos’ main facility Peace Naturals is situated on 95 acres in Ontario, where it’s just completed upgrades to buildings and has confirmed it’s on track to complete a massive new building. It also works out of British Columbia through its subsidiary Original BC, which has 31 gorgeous acres.
Medical marijuana, smokeables, oils, they’ve got it all.
Total projected annual capacity is 40,000 kg by 2019.
But it’s Cronos’ clear plans for global domination that earned it the title in my book.
- Owning the German Pharmaceutical Circuit: Cronos already has an exclusive five-year supply agreement through G. Pohl-Boskamp to its 12,000 pharmacies across Germany – currently the largest legal cannabis market in the world. This company has been around since 1835 and is a major force in Europe. Look for this partnership to expand.
- MedMen Canada: They’ve joined forces with the largest retail cannabis chain in California, called MedMen, to open stores and launch co-branded products across Canada. This looks like a very keen move. Speed will be key when Canada fires the starting pistol. Why not leverage the experience of someone who’s just pulled it off?
- Cronos Israel: It’s solidified a joint venture with an established Israeli agri-collective to produce and distribute medical cannabis. The climate there is favorable, the workforce is skilled… and its partner already exports to 35 countries in Europe and Asia.
- Cronos Australia: They own a 50% interest in a Down Under JV. First up: Construction plans for a 20,000-sq.-ft. indoor facility capable of producing 2,000 kg every year.
Cronos has been lining up these lucrative deals and knocking them down. Management is really doing its job.
Besides making friends in all the right places, Cronos is gobbling up with strategic acquisitions
It owns 21.5% of Whistler Medical Marijuana Co. (WMMC), a British Columbia-based grower and vender that prides itself on organic production. Whistler also sells live plants and “strain starter kits” for $750 each.
Additionally, Cronos owns 6% of ABcann Global Corp. (OTC: ABCCF), a medical-grade grower in Ontario, and 2% of Hexo Corp. (OTC: HYYDF), formerly Hydropothecary Corp., which remains the ONLY firm authorized to produce cannabis in the province of Quebec. Monopoly is a beautiful thing.
Folks, I’ve done a lot of research for this…
It’s not often that all the best independent experts in the space independently arrive at virtually the same conclusion… and to me, it signals one outcome ahead.
A profitable summer for pot investors.
Franklin Jay is the founder and editor-in-chief of ProfitableNews.com. A journalist by trade, he worked in the investigative unit at CBS-2 Chicago before earning post-graduate degrees in journalism and law from Northwestern University. He is an award-winning writer and researcher with over nine years of experience covering financial markets, commodities, and equities.
The information in this report is based on corporate filings, press releases, news coverage, and interviews. These sources are believed to be reliable, but it may contain errors or out-of-date information, and accuracy cannot be guaranteed. Nothing in this report should be construed as personalized investing advice; it is provided for informational and educational purposes only, and opinions expressed are our own. All trading involves risk. Consult with your financial advisor before making any decisions. Profitable News does not take compensation in any form for writing about specific securities or commodities.