1) Growth Industry (Understatement of the Decade)
“Legal cannabis could be an industry with revenues of $35 billion by 2020 if marijuana is legalized at the federal level. And that’s just representing revenues in the first year of countrywide legalization.” Those aren’t numbers that we came up with, those are from financial analysts that are confident we’re going to see federal legalization in the near future. It’s the type of opportunity that hasn’t been seen since the end of alcohol prohibition. This will be the realization of the American dream for a lot of entrepreneurs and investors.
2) First Mover Advantage
Ebay. Coca Cola. You know who they are because they were the first to do what they do. First movers identify a market opportunity and capitalize on it before the competition. This is a well documented phenomenon in every emerging industry, and if you consider that we haven’t even scratched the surface of scientific research for what cannabis can actually do, the potential for early moving business and investment is huge. And what we have seen so far is that some of these first movers are going to be great American companies that provide jobs and long-term value for the American economy.
3) Banks for Cannabis business
The elephant in the room last year was that hands-on business owners couldn’t bank. Entrepreneurs were storing cash in mattresses. It was the wild west. After the growing pains of 2014, banking in the cannabis sector looks like its becoming a reality. This is a huge step forward for the entire sector and should give investors a reason to give cannabis another look.
The image that comes to mind when most people think of penny stocks is something like Aerotyne Industries, from the Wolf of Wall Street. A shack in a mother’s backyard where the self proclaimed “CEO” both lives and works.
Sometimes that’s not far from the truth. We have seen some real scams over the last year. But there are some cannabis stocks that are affordable for the average investor, and have enormous potential to grow. How big? Nobody knows, but a lot of smart people are willing to place a bet in hopes of getting in early on a future industry titan.
And you don’t have to be in for the long haul. A lot of investors trade seasonally or day trade so that they are less subject to huge market swings. Most of the people we talk to are just middle class people that want to intelligently invest a bit and see how it goes for a few years and we think that’s great. In a few years some of these stocks will be just huge and hopefully we can help investors pick the right horse for the race.
The cannabis sector isn’t just about investing in the plant. It’s also about all of the products and services that grow from the plant. Maybe you don’t like investing in producers. Try vaporizer companies! They are huge right now, importing relatively cheap and increasingly popular vapor pens, and reselling them to American consumers for huge profits. Don’t like the American market? No problem, there are Canadian stocks too. Don’t like public investments? That’s fine too, private tech startups like Massroots are integrating cannabis consumers with social media. They just received some incredible venture capital this year and are doing great things with it. Don’t like recreational marijuana but want to support medical research? There’s a stock for that too.
Right now and for the foreseeable future, the industry really offers enough variety that there is something for everyone.