I’ve made no secret of my enthusiasm for marijuana as an explosive trend, and for certain pot stocks with big potential.

Today, let’s do something that may sound a little strange at first. Let’s set aside the companies that handle the actual marijuana flower, CBD oil, and hemp – and look at some what I call “secondary” plays.

Why? For one thing, without federal legalization, the NYSE and NASDAQ won’t list marijuana stocks that do business in the United States. So, if you are looking for big, established American stocks, you’ve got to get a little creative.

More importantly, though, secondary plays can actually be one of the best ways to participate in a long-term investment trend. That’s definitely true when it comes to marijuana.

These alternatives are often called the “picks and shovels” of an industry.

In the California gold rush of 1849, it was — literally — the sellers of the picks and shovels that got rich. They supplied all of the miners hoping to strike gold. We saw it again ourselves in the shale oil boom of the early 21st century. Besides the skyrocketing real estate prices in North and South Dakota, energy equipment makers soared in value.

That same principle can be applied to marijuana. Secondary companies will never touch the plant, which is an advantage at the moment, but they will still benefit from the burgeoning industry.

Two “Picks and Shovels” Stocks to Consider

Those of us who care for our lawns and plants are undoubtedly familiar with Scotts Miracle-Gro (SMG). It’s a $4.5 billion company that makes fertilizers and is best known for its namesake Miracle-Gro product. You might be sprinkling it on your lawn, but SMG also offers products for pest and disease control, seeding, and hydroponics (growing plants in water instead of soil).

Scotts is a major supplier to the booming marijuana industry, which relies on its products to boost cultivation output.

The stock had a rough 2018. Its cannabis-focused subsidiary, Hawthorne, was yet to be profitable, and the long winter kept consumer gardening products from making up for it.

But that all changed in December when the U.S. Farm Bill passed. This bill was a game changer because it legalized hemp production. But a lot of people missed the news.

Scotts started out 2019 strong, thanks largely to the cannabis business. Sales in the consumer lawn and garden segment were up 9% in the first quarter — but Hawthorne’s sales were up 84%.

Share prices climbed more than 35% early in the year but have pulled back.  Still, the stock should see continued upside with the strong performance of the entire marijuana industry.

Scotts Miracle-Gro is worth a look, but I see even better opportunities to make money off of marijuana. When it comes to “alternative pot stocks,” one of my favorites is Innovative Industrial Properties (IIPR).

In 2016, Innovative Industrial Properties became the first marijuana stock to ever list on a major U.S. stock exchange. As a real estate investment trust (REIT) that owns medical marijuana properties, this company does not touch the plant. That means it can list on the NASDAQ, which opens it up to a lot more investors.

Innovative Industrial Properties was one of the first companies to see the opportunity in helping marijuana companies with the growing process. The company buys freestanding properties from medical marijuana growers approved by their respective states. It then leases the properties back to the growers under a long-term agreement.

This gives the growers an infusion of capital to expand their operations and increase production… while Innovative Industrial Properties receives a growing stream of payments.

Pretty smart, huh?

The company is still small with a $740 million market cap. But it is growing rapidly — analysts are looking for 109% sales growth in this month’s earnings report — and the stock has done even better.

I recommended Innovative Industrial Properties in my Investment Opportunities service in August, and the stock is already up 125% for us. It also pays a solid dividend of 1.8%.

But here’s the thing. We bought the stock way back at $33.70, so based on our purchase price, our yield is a stellar 4.1%.

That’s just the latest example of why I always say: Grab these “diamonds in the rough” early on… before the rest of the world catches on.

And when you consider a business that’s so essential to a booming industry — and the company pays a fat dividend — the best could be yet to come.

P.S. Scotts Miracle-Gro and Innovative Industrial Properties are just the tip of the iceberg. The cannabis trend is still in its early innings, and new IPOs are coming to market all the time.

Now, if you want to invest in any hot new stock, you’ve got to do your homework. You’ve got to have a system. And you’ve got to get your timing right.

My Cannabis Cash Calendar does just that.

Our first Cannabis Cash Calendar recommendation is already up 70% in only three months. The next key date is April 4, when I will release my next recommendation.

I created a presentation on what the Cannabis Cash Calendar can do for you. Click here to view it now. Hurry and see what it can do for you so you’re all set for April 4.

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