Here’s some trivia for you: Which American holiday is #1 for beer retailers?
As you might have guessed by the timing of my question — it’s the Fourth of July!
According to the National Beer Wholesalers Association, the demand for beer right now is double that of a typical week. And the Fourth is a milestone for the industry, much like “Black Friday” is for other retailers.
Below is the full picture. It’s a fun data set for a short holiday week:
We see that, on some of the biggest days for backyard barbecues, beer companies are moving a lot of six-packs. No surprise there. I’ll probably have a few cold ones myself on the holiday.
So why — right in the middle of its best season — did one of the biggest alcohol distributors make a major investment outside of its industry?
Last August, Constellation Brands (STZ) announced that it was upping its investment in Canada’s premier cannabis company, Canopy Growth (CGC), to 5 billion Canadian dollars. Constellation is also permitted to take a controlling interest in the future.
If Constellation Brands doesn’t ring any bells, I’m sure Corona beer and Robert Mondavi wines do. The seller of these is a $38 billion company by market cap. And while it made the first move, it won’t be the last big alcohol company to venture into the marijuana industry.
Molson Coors (TAP), one of the top brewers in the world, went as far as mentioning legal marijuana as a risk to its business in its 2018 annual report. It, too, stepped into the space last August by partnering with HEXO Corp. (HEXO). Coors and HEXO are developing non-alcoholic beverages that are infused with cannabis. Edibles and beverages are not legal even in Canada just yet — but will be this fall.
In the United States, beer is currently a $110 billion industry. But there’s another trend at work here. And this one is generational. Take a look:
That chart comes from a report by Cowen & Co., whose analyst stated: “This work builds on our prior assertions that cannabis acts as a substitute social lubricant for consumers.”
That may be difficult for us to imagine today, but we clearly see the beginnings of the trend. We can look at states that have already made the move. Research shows that monthly binge drinking is lower in those states where recreational pot has been legal since 2016. And it is down 13%, which is not insignificant.
Bottom line: The entire alcohol industry knows that legal marijuana could crush its business. It’s a trend we’re certainly following closely in Investment Opportunities — where I’m about to release my next cannabis recommendation.
Cowen expects the U.S. marijuana industry to reach $75 billion in sales by 2030. Well, given the sales it’s taking from beer companies, that might even be too low.
It’s not uncommon for consumer trends to change. Just look at cigarettes. In the early 1980s, this was a $180 billion industry (in 2011 dollars). Today, it’s just $77 billion. So, looking forward, I could definitely see weed passing grain in the coming decades.
Constellation is certainly keeping its eye on the ball: It got one of its senior VPs a new gig as Canopy Growth’s CFO, and has now moved to replace its CEO as well.
This is all intended to prepare for the United States joining its northern neighbor in fully legalizing marijuana at the federal level.
There is no doubt in my mind this will occur.
In fact, the U.S. House of Representatives is holding a hearing on precisely that topic next week! Both Democrats and Republicans are bringing witnesses who work on the pro-legalization side. You can bet I’ll be following that story closely.
In the meantime, I’ve got a pretty good idea how to invest in this global mega-trend — well before it fully plays out.
Why I Like U.S. Penny Pot Stocks Now
At Investment Opportunities, we were able to ride Canadian stocks like Canopy Growth much of the way higher, which I’m quite proud of. But then a lot of the most attractive Canadian pot stocks just got too expensive to buy.
However… many attractive U.S. stocks are both undervalued and still in “penny stock” territory.
Penny stocks often get a bad rap. But they are actually critical to the global marketplace. The world NEEDS tiny companies — just as much as bigger ones. They’re the job creators. The innovators.
And as an investor, if you’re looking for the next Netflix or Apple, this is where you’ll find it.
You just want to be VERY choosy about which ones you buy.
I’ve developed a five-step system for finding great investments in the current “crop” of new marijuana stocks.
I call it the Cannabis Cash Calendar. I designed it to let investors like you benefit from one of the best wealth-creating strategies throughout history: Buying early.
You can get in on the action – and be ready for the new recommendation – by reviewing the details and signing up here.
P.S. We’re already seeing great success with our Cannabis Cash Calendar. One of our first plays was Elixinol Global (ELLXF). It’s up 74% for my subscribers now. Other cannabis stocks have made us 153%, 276%, even 564%.
But let me be clear. You never want to just buy any old IPO – even in a transformative industry like legal marijuana.
There’s lots of homework involved. You need in-depth research. You need comprehensive and smart analysis. And it’s crucial to get the timing right.
There is still time for you to get in on our next recommendation as soon as it’s recommended. Click here for more on this compelling opportunity.
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