Nick Giambruno’s Note: Regular readers know we’re at the start of a huge legal marijuana boom. But the marijuana space is still highly volatile. That’s why my colleague Justin Spittler, editor of the Casey Daily Dispatch, put his boots on the ground last year to find the best—and safest—ways to play this trend…
What the hell do I wear to this thing?
Do I wear my suit? Or should I buy a tie-dye shirt?
Recently, I was asking myself these questions while staring at an empty suitcase. My flight was taking off in just a few hours.
I was headed to Oakland, California, to attend the 4th Annual Cannabis Business Summit and Expo.
That’s right. I flew over 2,500 miles to learn about the marijuana industry.
Simple—the legal marijuana business is booming. And it's presenting the opportunity of a lifetime.
In 2016, the industry grew 34%. That’s over 10 times the growth of the U.S. economy the same year.
Marijuana millionaires are now being minted across the country.
But you don’t have to work in the industry to make a fortune off this trend. Everyday investors can cash in on this boom, too.
I’ll show you how to do that at the end of today’s essay.
• But let me first tell you about my recent field trip…
The morning after landing in Oakland, I put on my suit (I decided to play it safe), grabbed a stack of business cards, and took an Uber across town.
I arrived at the convention center around 9 a.m. The place was packed to the brim.
I saw other men in suits… a lady with purple hair… and several guys with dreadlocks.
It was an eclectic bunch, to say the least. But make no mistake…
• This conference was serious business…
The first guy I met worked for an HVAC company based in California.
His business had already set up HVAC systems in four marijuana-growing operations. But his boss wanted to do many more deals like this. So, like me, he went to Oakland to learn as much about the industry as possible.
After chatting for a bit, we exchanged business cards. I made my way to the convention floor next.
There, I met a man from Las Vegas selling marijuana-infused teas and coffees.
Later, I spoke with a salesman for a security systems provider. His company was selling everything from infrared cameras to robots that patrol large marijuana farms.
There were also companies selling industrial-grade lights, irrigation systems, and organic soils. There were analytics providers, software firms, and distributors. There were even lawyers and accountants offering their services to the industry.
In short, there were all sorts of people and companies at this convention. But they all had one thing in common…
• Everyone was trying to strike it rich in marijuana…
Many of them will, too.
Again, that’s because the marijuana industry is red-hot.
If you've been reading International Man, you already know this. I've been covering the opportunity in marijuana stocks for months.
It’s already a $7 billion industry. By 2021, the industry is projected to be worth nearly $23 billion.
In other words, it’s on pace to more than triple in size over the next three years. That’s a staggering growth rate. But even that might be lowballing the industry’s potential.
In fact, one “potrepreneur” at the conference told me he thinks the marijuana industry will soon be worth $100 billion.
That’s a bold call. But this guy knew his stuff.
He studied finance at the Wharton School of the University of Pennsylvania. He was an analyst for McKinsey & Company. He worked on mergers and acquisitions for Deutsche Bank in London. And most recently, he served as the VP of corporate strategy for a major U.S. real estate company.
In other words, the guy was no slouch. More importantly, he could work in just about any industry. And yet, he wanted to conquer the marijuana market.
This industry is no longer just for stoners. The “smart money” wants a piece of the action, too.
• Yet, most retail investors still want nothing to do with this red-hot market…
That’s because marijuana is still illegal at the federal level.
I've said that the U.S. can't win this War on Drugs. It should have never entered this conflict in the first place. Casey Research founder Doug Casey agrees, saying this war itself is criminal, completely insane, and totally counterproductive.
Right now, the Drug Enforcement Administration (DEA) classifies marijuana as a Schedule I drug. They consider it more dangerous than cocaine or methamphetamine.
To make matters worse, Jeff Sessions, Trump’s attorney general, infamously said that marijuana was “only slightly less awful” than heroin. He also asked Congress to let him prosecute medical marijuana providers. And more recently, he went after states’ rights.
• This is why a lot of people think Trump could soon shut down the industry…
But the chances of that happening are actually slim to none.
You see, Trump has much bigger problems than the marijuana industry right now.
For starters, the U.S. appears to be on the brink of nuclear war with North Korea. Plus, there’s an opioid epidemic that’s devastating communities across the country.
These are actual problems, unlike an industry that's created hundreds of thousands of jobs and billions of dollars in revenue.
• Most importantly, Trump couldn’t kill the industry even if he tried…
But don’t take my word for it.
Take it from Troy Dayton, CEO of Arcview Market Research:
While the uncertainty created by the mixed signals coming out of the Administration may cause a temporary dip in some valuations of cannabis companies and some more risk-averse institutional investors and multinational companies may continue to stay on the sidelines, it won’t impact the growth of the market much at all.
No matter what the administration does, states will continue to issue cannabis licenses to a long line of applicants and licensed cannabis outlets will continue to have long lines of consumers ready to purchase this product from regulated establishments.
Arcview is one of the country’s leading cannabis research companies. According to their research, the legal marijuana market should grow 27% per year over the next three years, even if Trump goes after the industry.
That would make legal marijuana the fastest-growing major U.S. consumer industry since the broadband internet market boomed in the early 2000s.
In short, the marijuana industry is going to boom, no matter what Trump does.
• So, don’t let politics keep you from investing in marijuana…
That said, you have to understand that it’s not easy to invest in marijuana stocks.
There’s no blue-chip marijuana company yet. Plus, most U.S. marijuana stocks trade over the counter. They’re “penny stocks.” This makes them riskier than big stocks that trade on the New York Stock Exchange.
So, if you decide to speculate on marijuana stocks, here are three ways to stack the odds in your favor…
Don’t put all your eggs in one basket. Don’t buy one or two pot stocks. Instead, spread your money across several. Here’s a complete list of marijuana stocks to help you begin your research.
Don’t get greedy. Remember, marijuana stocks are highly speculative. So don’t bet the ranch on them. Only bet money that you can afford to lose.
Have an exit strategy. Take profits when you get them. I also encourage you to take a “Casey Free Ride” on any pot stock that doubles. A Casey Free Ride is when you recover your initial investment (take profits) on a stock that doubles for the first time and ride whatever upside is left, 100% risk-free. It's essentially like playing with “house money.”
These three strategies will allow you to speculate on pot stocks without exposing you to big losses.