An Incredible Legal Marijuana Business That’s About to Explode

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It’s finally here…

The legal marijuana investment I’ve been waiting for years to make. A way to put one of the world’s most powerful business strategies to work for us… and make huge capital gains for years.

In today’s essay, I want to tell you more about this investment… which you can easily buy in your brokerage account. But first, I want to tell you about a powerful strategy… and one of the genuine secrets of building wealth. I learned it from legendary investor Warren Buffett.

A warning: Although this strategy produces incredible investment returns, it’s not something you’ll want to bring up at the dinner table. The Wall Street Journal isn’t going to run regular columns on this concept. Mainstream magazines won’t run cover stories on it. Still, if you want to build wealth in common stocks, it’s critical that you know how it works…

What History Teaches Us About Making Money in Stocks

If you look at the list of the 20 best-performing large U.S. stocks from 1957 through 2003 that kept their basic corporate structures intact, you’ll note that many were branded consumer goods companies that sold habit-forming products. It jumps right off the page.

For example, Philip Morris (PM) tops the list. It was the top-performing large U.S. stock from 1957 to 2003. It sold cigarettes, which contain addictive nicotine.

PepsiCo (PEP) and Coca-Cola (KO) are on the list. They sold soda, which is essentially a sugar and caffeine delivery vehicle. You’ll also find Hershey (HSY) and Tootsie Roll (TR) on the list. They sold chocolate and sugar. Wrigley is on the list. It sold sugary gum like Big Red and Juicy Fruit. People love sugar rushes. They are very habit forming.

Fortune Brands, which was called American Brands, is on the list. It sold cigarettes and alcohol.

And then you have many drug makers on the list. The companies here are Merck (MRK), Pfizer (PFE), Abbott Labs (ABT), Bristol-Myers Squibb (BMY), Wyeth, and Schering-Plough. Their customers grew accustomed to taking certain drugs.

A lot of fast food is addictive. Fast food chains pack their food with stuff that makes people want more. This is part of the reason McDonald’s (MCD) has been such a corporate success.

The stocks I just listed generated more than 13% annual gains for decades. Those returns are rare in the stock market. It’s very hard to find anything better.

Invest $10,000 in a stock that gains 13% a year for a decade and you more than triple your money. Keep that up for two decades and you’ve made more than 1,000%.

The reason they did so well is simple…

When customers form a habit around a product, it helps ensure repeat business. People get used to certain feelings, flavors, and brands. They don’t like switching. Also, when people make a habit out of consuming a product, they’ll continue buying it even if the price goes up a little. These qualities help companies sustain solid profit margins and steady sales growth.

It’s also worth mentioning that when consumer product companies create hit recipes and substances, they don’t have to constantly spend money trying to improve them. They don’t have to spend tons on more research and development. Once Hershey hit on its recipe for chocolate, it didn’t have to change it. The same goes for Coke, Tootsie Roll, and Budweiser.

When you create a product that people love and develop habits around, you don’t spend money and time tinkering with it. This means a substantial percentage of revenues can be sent to shareholders.

These sellers of branded, habit-forming consumer goods, by the way, are the kinds of companies Warren Buffett, the greatest investor in history, always looks to buy. Two of Buffett’s most famous, most successful investments are Coke and See’s Candies.

If you want a relatively recent example of this strategy working beautifully, look at Starbucks (SBUX). It’s one of the great success stories of American business.

Starbucks coffee is traditionally higher in caffeine than other brands. This helped it become more addictive. From 1995 to 2006, Starbuck’s market value advanced more than 2,000%. Starbucks was (and is) great at selling habit-forming products, and shareholders made a fortune.

Other Benefits of Investing in Habits

Owning businesses that sell simple, habit-forming products is great for those of us who don’t follow changing technologies.

When you own high-quality consumer-branded stocks like Coke and Starbucks, you don’t have to try to pick winners from the complicated world of high-tech. You can make huge returns in “low tech” companies. It’s very unlikely that enjoying a beer after work or treating children with chocolate will become obsolete.

Regular demand… popular products… robust profit margins… dedicated customers… less ongoing investment needed to sustain the business… a hearty endorsement from Warren Buffett. That’s why I’m ALWAYS on the lookout for high-quality consumer-branded businesses for my readers to own.

And when you can marry this powerful concept with one of the world’s biggest long-term investment trends? Read on…

Powerful Business Strategy + Massive Long-Term Trend

Regular readers know that I believe legal marijuana is one of the biggest investment opportunities in the world right now. Marijuana has been outlawed most everywhere for decades… but now a wave of legalization is starting to sweep the world. I believe this will create massive new markets and produce massive stock winners.

For years, it was almost impossible to find high-quality consumer product companies in the legal marijuana space. But now, one such company just recently started trading… at the perfect time.

Marijuana may not be legal on the federal level, but hemp is expected to be any day now when Congress passes a new Farm Bill. The two cannabis cousins have huge potential, and the moment hemp becomes legal, a door to massive growth opens.

How massive?

Try 40 times its current size.

One research firm estimates that the hemp-CBD (cannibidiol) market will hit $22 billion by 2022, 40 times more than the 2018 projection of $550 million.

Those are life-changing profits in only a few years.

The company I just recommended to my Investment Opportunities readers is right in the sweet spot with a variety of consumer products from dietary supplements to topical balms, foods, medicinal cannabis… even dog treats. (Don’t laugh. A lot of pet owners like CBD for its relaxing properties.)

Just the kinds of products customers get attached to.

Valuations alone make this company a great buy right now. When you add in growth potential and an industry about to explode thanks to imminent legislation, you’re looking at a no-brainer.

I expect this stock to be a five-bagger for us in just three years.

If you’d like to learn more about this stock and its huge potential, consider taking a risk-free trial subscription to my Investment Opportunities research service. You’ll take on zero risk… but learn all the details on this stock that could have a huge positive impact on your net worth. Click here to learn more about my legal marijuana research.


Article printed from InvestorPlace Media, https://investorplace.com/moneywire/2018/12/an-incredible-legal-marijuana-business-thats-about-to-explode/.

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