by Nick Giambruno, Casey Research:
Widespread marijuana prohibition is coming to an end. This fact has long been inevitable. Now it’s imminent.
Millionaires and billionaires will come out of this…
Longtime readers know that Doug Casey and I (Nick Giambruno) are expert “crisis investors.” We fly around the world chasing turmoil and the profitable opportunities it creates.
Doug and I spend much of our time in the world’s most obscure and violent places. More often than not, that’s where we find the worst crises—and the best fortune-building opportunities for our subscribers.
But we recently found a once-in-a-generation opportunity in a slightly less exotic place… Canada.
Canada is at the forefront of the enormous global cannabis market.
At first, marijuana stocks might not seem like a classic crisis investment. The industry isn’t coming out of a brutal bear market or downturn. Instead, it’s in the early innings of a mega bull market.
However, crisis investing is also about taking advantage of politically caused distortions in the marketplace. And it’s about profiting from aberrations of mass psychology.
This is what we’re doing with the legal marijuana market.
The reality is, the marijuana market has been in one long crisis since the ’30s. This is when the US government prohibited it at the federal level.
President Nixon turbocharged the crisis when he started the “War on Drugs” in the 1970s.
This pointless war has killed an untold number of people. It’s put millions behind bars, even though they never hurt or threatened other people or their property.
It’s even ravaged entire countries. Just look at the horror it’s inflicted in places like Mexico and Colombia, where it’s killed hundreds of thousands of people.
Thankfully, this bloody war is almost over.
Right now, leaders around the world are rethinking marijuana prohibition. Many longtime “drug warriors” are even changing their tune on marijuana.
The “War on Drugs” has pushed hundreds of billions of dollars in marijuana profits underground.
Today, this industry is like Mount St. Helens right before an eruption. Soon, billions of dollars will explode from the underground market and flow into legitimate businesses.
The United Nations estimates it to be worth around $150 billion annually. I think that’s conservative.
To put that figure in perspective, only $17 billion worth of silver was produced in 2016. So the silver market is about 1/10th the size of the marijuana market.
The marijuana market is also bigger than the iron, copper, aluminum, coffee, corn, and wheat markets.
Until now, almost all of these hundreds of billions of dollars were off-limits to people like you. But that’s about to change.
The end of marijuana prohibition means we can profit off marijuana without risking jail time.
Marijuana millionaires and billionaires will come out of this. But you don’t have to work in the industry to make a fortune.
Everyday investors can get rich off the marijuana boom, too.
For more on this, I turned to Doug Casey. You’ll find our conversation below.
Nick Giambruno: Doug, I think cannabis will become a mainstream big business over the next few years. Legitimate companies are already working to commercialize this useful plant in various ways. What’s your take?
Doug Casey: I completely agree. Pot has been proven to have huge medical applications. I think there’s going to be a big recreational market too, at least the size of that for alcohol. And industrial applications for hemp, as a substitute for cotton in fabrics and wood pulp in paper, are gigantic. In fact, these applications will eventually dwarf other uses for hemp.
Nick Giambruno: Have you invested in the space?
Doug Casey: So far I’ve invested in two private cannabis companies that are going to go public.
I bought 500,000 shares of one, a couple of years ago, at a dime per share. I rarely put money in private start-ups—70% of the time they go to zero. In its last round, however, this company privately raised money at $2.25 per share. It looks like they’re going to bring it public at around $4, and if the market’s hot it will go to $10. Potentially a big hit. It has the potential to be a 100-bagger. You need one of those occasionally to compensate for the inevitable losses of putting money in private companies where you’re a minority shareholder.
At that point, I’ll have to figure out whether it’s a real business or just a fortunate speculation. But the big gains in cannabis stocks are still ahead of us. Most of the public companies are still far too small for institutional investors. The big money has yet to participate.
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