Cannabis Investors: Look Here First

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In today’s Profit Watch I’m going to outline for you what may possibly be the best investment opportunity anywhere in the world over the next five years.

I mean this quite seriously.

You’re unlikely to see something this compelling again over the next decade, maybe even your lifetime. 

I’m talking about the growth of the global cannabis industry.

You should feel lucky. It’s rare to be able to capitalise on the explosion of a new industry with this kind of scale.

Historic opportunities like this simply don’t come along all that often.

Cannabis has already minted fortunes for a select, few early investors.

Canadian stock Canopy Growth Corporation [NYSE:CGC], for example, has risen over 2000% since July 2016.

These incredible returns were spurred by the current full marijuana legalisation that have passed in Canada and some select US states.

But please do not think you’re too late here. 

The runway of prospective growth doesn’t stop at the Canadian border.

The current shift happening is worldwide in scope and the potential market is staggering.

Germany, for example, is becoming a huge budding market for medicinal marijuana. The UK legalised medicinal marijuana last year too.

These two countries together have a population four times the size of Canada — and Canada currently has a shortage of marijuana from too much demand!

You can cash in on this exploding market — in many more ways than one.

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The opportunity around marijuana is so big, in fact, it can be hard to know where to focus your attention and capital.

Should you invest in medicinal marijuana?

Should you invest in recreational marijuana?

Do you buy ‘pick and shovel’ plays like greenhouses or producers in Columbia?

I’m going to narrow it down to one segment for you in this report.

Think of it as the shortest roadmap to profit you’ll find.

It’s the sector to be buying right now.

The road has opened up here

That sector is hemp.

While that might sound strange, I’m sure like most people, you associate the word cannabis with marijuana and all the connotations that brings.

However, the most immediate opportunity for you as an investor is in marijuana’s ‘sister’ plant.

Let me explain…

Hemp is a type of cannabis plant.

However, hemp does not contain high levels of THC — the natural compound that marijuana users seek for a psychological ‘high’.

THC is officially classed as a ‘cannabinoid’. Keep this term in mind.

Historically hemp has been used for industrial uses like rope, clothing, building materials and paper…and nothing to do with drug use.  

Here’s a nifty comparison of the two plants:

A screenshot of a cell phone  Description automatically generated

Source: Elixinol Global

However, hemp’s current attractiveness as an investment opportunity stems from another cannabinoid known as cannabidiol or ‘CBD’.

Hemp is rich in this chemical compound. CBD is thought to help influence such functions as mood, sleep and appetite.

CBD is also said to be rich in fatty acids and antioxidants and contain anti-inflammatory properties too.

It has become a popular ingredient in the health and beauty industry. This can be in the form of, but not limited to, oil, creams, sprays and lip balms.

Hemp foods are also thought to contain dietary benefits as well, including being high in fibre and protein.

Point being: Both hemp and the CBD market have the potential to expand on a huge scale.

I’ll go over some figures below.

However, before I get to that, I want to point out an important change that occurred last year in the United States.

Because unlike marijuana (both medicinal and recreational), the CBD market now has few US federal legal impediments to expansion.

That’s why I say it’s the cannabis opportunity that will likely move first…

A historic change happened in 2018

Last year, US President Donald Trump signed something called the ‘2018 US Farm Bill’ into law.

This removed hemp from the Controlled Substances Act (CSA) in America at the federal level.

The importance of this move cannot be overstated.

When the CSA was signed into law, hemp was deemed to be illegal because it’s a type of cannabis.

So even though hemp doesn’t possess the THC content that marijuana does, it was classified as a Schedule I drug.

That’s no longer true for hemp. Now, it is regulated as a simple agricultural commodity.

The story for marijuana is different.

Currently, there’s a murky grey area between the US state and federal law. Marijuana is still illegal at the federal level.

That means companies involved in the US marijuana trade have restricted access to banking, finance and insurance. They also run the risk of prosecution.

Business involved in hemp and CBD products no longer face the same level of issues thanks to the passing of the 2018 US Farm Bill.

Do be aware that individual US state regulations can still restrict hemp and CBD in a myriad different ways.

However, firms involved in hemp and CBD can now market their products much more freely and heavily to the massive buying power of the US consumer.

It’s the enormous size of the US population that can send stocks higher by hundreds of percent. Whoever wins market share here has a staggering number of people to monetise. 

To put this into context, the current entire Canadian economy is only as big as that of Texas.

And nothing may be hotter in America right now than CBD and hemp…

Look at the potential growth here

According to a recent report issued by the Brightfield Group, the hemp-derived CBD market is expected to grow from an estimated $591 million in 2018 to as much as $22 billion by 2022.

That’s a huge potential expansion.

Such figures are projections. But there’s little doubt that the expansion of CBD and hemp related sales will be large if consumers continue to value and desire it.

But there is a risk you must be aware of. While there is much anecdotal evidence that CBD contains health benefits, there’s little scientific evidence.

This stems from the prohibition around cannabis for decades that stymied research for years.

However, there’s no investment without risk.

Companies related to hemp and CBD should be on your watch list.

All the best,

Callum Newman Signature

Callum Newman,
Editor, Profit Watch

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