I have a very type “A” personality, which you may well have guessed already. I’m also in the business of investing and helping people make money, and while I absolutely love what I do and wouldn’t trade it for anything in the world, I’m not ashamed to say that it can lead to anxiety and stress.
I have tried different ways of dealing with it, from traditional medication to meditation and yoga, but recently I tried something that really amazed me.
During a trip to Kansas City to attend a wedding, I visited a store that sells what’s called CBD oil. I spoke with the owner of the store at length and he offered me a sample droplet to try in a drink. I quickly felt my anxiety and stress levels fall, and the effect lasted throughout the day. I went back to the store to purchase a vial of the oil and tested it for a month. I’ve just finished up my trial, and I was very pleased with the calming results.
Here’s where it gets interesting: CBD oil is extracted from hemp plants, is also found in marijuana plants and is the basis for several drugs currently undergoing FDA trials. Just to be clear, CBD is already perfectly legal and does not get you high like smoking marijuana does. Instead, the oil in the plant helps fight everything from anxiety to cancer to severe pain, and it’s why medical marijuana is proving to be such a great treatment for certain illnesses.
That makes CBD oil just one part of a powerful NexGen mega-trend that has the potential to make people a lot of money: the benefits and expanding legalization of marijuana.
More “Growth” Means Big Growth
This is one of those rare opportunities for investors to get in early and be positioned to make big money over the years. The focal point right now is Canada, which is years ahead of the U.S. as it has already legalized medical marijuana on a federal level and all signs point toward its recreational use becoming legal in the next few months.
On Monday, two of Canada’s largest marijuana companies announced the biggest merger in the industry so far. Aurora Cannabis (ACB on the Toronto exchange) is buying MedReleaf (LEAF on the Toronto exchange) for 2.2 billion U.S. dollars. The combined company will produce 1.3 million pounds of cannabis each year and have distribution networks in Canada, Australia, Europe and South America.
I expect more countries around the world will follow suit. (Not to be overly cynical, but legalization will definitely bring in more tax revenue.) Here in the U.S., the marijuana industry has already brought in billions of dollars in taxes and created more than one hundred thousand jobs – even as its use is still limited in this country. That is changing, though, and President Trump recently assured a Colorado senator that the federal government will be hands off when it comes to the 29 states that have voted to legalize marijuana on either a medicinal or recreational level.
Whether you’re for or against its legalization is your business, and I am not here to try to change your opinion. But from an investing perspective, the potential is abundantly clear. According to New Frontier Data, marijuana sales (both medical and recreational) will reach $11.7 billion this year and climb to $25 billion over the next seven. Another estimate comes from Constellation Brands (STZ), the alcoholic beverage company that just paid $191 million for 10% of Canopy Growth (TWMJF), Canada’s largest marijuana producer. Constellation says U.S. cannabis sales are already $50 billion – last year’s wine sales brought in $60 billion – and could reach $200 billion in 15 years. If marijuana is legalized on a federal level sometime in the next decade, those numbers could end up much higher as surveys show that millennials believe marijuana is safer and better for you than alcohol.
The Real Opportunity Wall Street Is Missing
If you are looking to gain exposure to the broader marijuana mega-trend now, you can consider the Alternative Harvest ETF (MJ). It is composed of the largest marijuana stocks in North America with heavy exposure to Canada. In fact, its largest holding right now is MedReleaf and Aurora Cannabis is its 10th-largest holding. It can be volatile, which shouldn’t surprise you, but the trend has been higher (see the two-year chart below), and it is a good basic choice for long-term investors.
I recommend MJ in my Profit Multiplier service, and I believe you should also invest in individual stocks to outperform the ETF or work in conjunction with it to boost your returns. That’s why I recommend two additional stocks in Profit Multiplier, one of which is a Canadian company and the other is based in the U.S.
Looking further ahead, I think there is even greater potential in some of the niche themes in this industry that are setting up for outsized growth. Getting in early here could generate some huge returns, and that’s where I am focusing a lot of my work in this sector.
I can’t share everything with you quite yet, but let me at least give you a hint of one area I’m looking at that is absolutely genius. I’m talking about royalties, which you probably wouldn’t think of when it comes to marijuana, but here’s how it works: These companies provide financing and support for marijuana producers in exchange for a small portion of equity and – here’s the really cool part – they also get the rights to buy some of the cultivated marijuana at a discounted price. And guess what they can do with it? Turn around sell it for a nice profit!
I’m not sure if Wall Street is ignoring this area or simply has no idea it exists, but it is flying way below the radar right now. And that’s exactly what we want!
I’m working on a full research report right now and definitely have some very attractive candidates to invest in. I plan to talk with CEOs of these companies soon, and I will release the full report to my subscribers in the coming weeks. (Click here to learn more.)
The bottom line is this: The marijuana mega-trend and industry are still in their very early stages. Now is the time to buy if you are a long-term investor who is willing to ride the inevitable ups and downs in exchange for big profits. By the time this trend becomes widely accepted and known, that big money will have already been made. We don’t want to look back with regret.