Investing in legal gray areas … the next controversial market sector offering big returns … the company in Luke Lango’s crosshairs
“I wish to unsubscribe from your publication. This is based on (your Digest) which seemingly supports the legalization of marijuana.”
“Only pigs with no morals or regard for young people would push for this.”
“Rubbish. Retract the marijuana endorsement or I cancel the subscription.”
Nearly two years ago, we featured investment research from Matt McCall about the legalized marijuana sector.
The feedback from readers ran the spectrum from supportive, to unsure-yet-open-minded, to outraged.
In response, I wrote a Digest explaining our position. In a nutshell, whatever your stance on legalized marijuana, we respect it, and aren’t here to change it.
We don’t feel it’s our place to judge the morality of marijuana, or anything else, for that matter. Doing so would inevitably mean we’d censor or promote content based on our own notion of right and wrong. But who are we to make such decisions for you?
Instead, we believe our responsibility is to provide the most current, well-researched, thoughtful investment insights in the market. The decision to act upon that research, or not act, is wholly up to you.
In response to that Digest, we received even more mixed feedback.
***One email in particular stayed with me …
“Mr. Remsburg, your above marijuana arguments are invalid. The Federal government declares it a controlled substance, that is, it is illegal regardless of State laws decriminalizing or ‘legalizing’ it.
The fact that you consider and give advice regarding marijuana as an investment is de facto promotion of marijuana. If you try to argue otherwise you have no credibility.
Why would I take investment advice from such a shallow self-serving ‘thinker’ with no credibility?! Hint: I don’t!”
I found this email interesting for two reasons …
First, it gave ultimate authority to the federal government rather than individual state governments.
But on what grounds are federal laws more moral, just, or wise than state laws?
After all, our nation’s system of Federalism supports a balance of power between state and federal governments, not a blanket deferral to federal laws.
Second, the federal government’s position on significant social issues has changed over the years.
For example, take alcohol. From 1920 to 1933, the United States government banned the production, importation, and sale of alcohol. As we know, alcohol is now legal.
Was alcohol any different when it was illegal versus legal? If not, then doesn’t that call into question the federal government’s own judgement since it reversed its position?
Or we could point to birth control.
The Comstock Act was a federal law that, practically speaking, made birth control illegal. A husband and wife violating this law in the privacy of their own home could be arrested and subjected to a one-year prison sentence. The law wasn’t fully repealed until 1965.
I believe most people would agree that birth control has been, at large, a positive for society. So, should we have ignored such personal judgments and rallied against birth control purely because the federal government prohibited it?
Fast-forward to today, and the federal government’s position is changing again.
As we noted in Monday’s Digest, the House of Representatives just passed the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, which would remove marijuana from the Controlled Substances Act.
Though not yet a law, the movement suggests federal marijuana legality is likely a matter of “when” not “if.”
So, personal moral views on marijuana aside, if we assume that the reader above didn’t consider a marijuana investment based purely on federal illegality, then there’s a sad, missed opportunity cost …
This person missed huge returns (before the sector crashed) due to a law that is now in the process of being reversed.
That’s genuinely unfortunate.
***So, why rehash all of this now?
Because we’re about to go through this exact same process all over again.
Today, certain cities have already legalized another taboo substance. And earlier this fall, the first state in the nation officially legalized it. Other states are exploring legalization.
Despite all this, it’s still a Schedule 1 drug according to federal law.
Meanwhile, similar to the early days of the marijuana sector, there will be massive investment gains.
In fact, they’re already happening …
Luke Lango and his Daily 10X Stock Report subscribers just toasted their second 1,000%+ returning stock, pushed higher by the topic we’ll discuss today. And this 10Xer needed less than six months to happen.
So, in this Digest, let’s dive into another controversial investment sector with massive wealth-generating potential.
We present it without moral judgement — rather, with the belief that you are fully capable of deciding what is right and wrong for yourself.
With that in mind, let’s talk about psychedelics.
***From illegal to mainstream, part 2
For newer Digest readers, the Daily 10X Stock Report was created earlier this year for one sole purpose:
Deliver to your inbox –every day the market is open — a top-notch small-cap stock pick that could rise by 1,000% or more in the long run.
Luke’s subscribers recently celebrated their first-such 10X winner — Chinese electric vehicle company, NIO.
As I write, 10X subscribers who acted on Luke’s recommendation back on May 27th have watched NIO climb more than 1,300% before its recent pullback (it’s still up 1,052% as I write).
Fresh on the heels of the NIO-celebration, Luke has done it again with the pick we’ll discuss today.
But before we get into company, let’s discuss the trend powering the gains.
Over the next decade, psychedelics will go from taboo to mainstream, and the accompanying “Shroom Boom” of the 2020s will look a lot like the marijuana boom of the 2010s …
Much like marijuana, psychedelics were classified as a Schedule 1 drug back in 1970. But, as they did with marijuana, the science and sentiment surrounding psychedelics are starting to change.
It all started in 2014, with a small study at Johns Hopkins University which found that psilocybin (aka “magic mushrooms”) helped people quit smoking. Specifically, the study found that psilocybin led to an 80% quit rate among active smokers, more than double what was standard across other, non-psychedelic studies at the time.
Since then, a wave of academic research has emerged which supports the notion that psychedelic-inspired medicines are effective and superior treatments for things like addiction, ADHD, depression, anxiety, and anorexia.
In his issue, Luke details more of the psychedelic industry’s transition toward the mainstream. He then suggests that today, it’s where the marijuana sector was back in 2015.
Back to Luke on what this means for investors:
This market is going to explode higher over the next decade as psychedelics follow in marijuana’s footsteps.
***So, which psychedelic stock is behind Luke’s second 10X-winner?
Luke explains that it’s a tiny, $60 million company that is pioneering a new class of psychedelic-inspired medicines for the treatment of various mental and behavioral health issues.
The company’s portfolio of psychedelic medicine is aimed at two huge markets: addiction and ADHD.
Here’s Luke with more:
Its addiction medication, 18-MC, is built to normalize dopamine irregularities in patients. It is currently in Phase 1 human trials and is expected to enter Phase 2 trials by the end of the year.
Meanwhile, the company is pioneering Phase 2 Microdosing Trials for LSD and Psilocybin in treating ADHD. These are the first trials of their nature.
If MindMed is successful in bringing psychedelic-inspired medicines for addiction and ADHD to market — and the company should be — the potential upside in MindMed stock is enormous.
In terms of sizing the market for MindMed, Luke points toward worldwide pharma sales for opioid abuse totaling $2.9 billion in 2019.
Meanwhile, worldwide pharma sales for ADHD totaled $9.2 billion in 2019.
That’s a combined $12 billion market that MindMed is seeking to disrupt.
***So far, here’s what that’s meant for MMEDF’s stock since Luke highlighted it to readers
Now, before you think that you’re too late, Luke wrote to subscribers that this stock will see 5,000%+ upside going forward.
At just 10% market share, MindMed could be a $2 billion+ revenue company one day. A market-average 2x sales multiple on that equates to a potential future valuation of $4 billion or more, implying 5,000%+ upside potential for MindMed stock.
As we wrap up, another big “congratulations” to 10X subscribers on their second 1,000%+ winner since May. We expect there will be plenty more to come.
In the meantime, we’ll keep you updated on the federal government’s stance toward marijuana and psychedelics here in the Digest.
With history as our guide, we expect changes are on the way.
Have a good evening,