I fathom that marijuana will be legal in most (if not all) 50 states within 5-10 years. The question is, how do you become filthy rich from the trend? Even if you are a stoner.
Looking at history, there are 4 general ways when it comes to making money within any new industry.
1. Grow, Manufacture & Distribute: I wouldn’t know anything about growing or selling marijuana so I digress on this point. There should be a number of other resources on this matter out there.
2. Sector Servicing: Also known as, selling shovels to the gold miners. For instance, last I have heard, retailers in Colorado are unable to deposit revenue generated by their businesses into banks due to Federal regulations. Anyone who solves this problem becomes an instant millionaire. There are many others, but I am not involved in the industry to give any other worthwhile advice on this point.
3. New Products Associated With Marijuana: From pot brownies and pot strawberry/chocolate bars to e-pot cigarettes….use your imagination. Come up with a must have product and you are a few months away from a 60 foot yacht with 10 topples girls on board. The sky is the limit.
4. Stock Market: Invest in marijuana related companies. Unfortunately, since the industry is so new and technically still “illegal” in most states, there are a very few companies to chose from. There are many penny stocks associated with the industry, but they are too risky. Based on my quick research, there are 3 more or less prominent companies in the industry that are listed. They include GWPH, CANN and CANV. Again, investing in such companies is not without risk. There will be big winners and complete losers. However, if you are able to pick that winner and buy the stock at the right price it should be an easy 10X or even 100X over the next 5-10 years.
That about covers it. If you would be interested in participating in the sector, pick a category and go for it. I hope this helps.
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How To Invest In Weed To Get Filthy Rich Google
Call it a drug trade for investors. Todd Harrison, CEO and founder of Internet-based financial media company MInyanville, thinks cannabis “will be the single best investment idea for the next ten years.”
But while the public has watched recreational marijuana take off in Colorado this year, how can they profit from it as an investment theme?
Harrison believes it will be driven by the broader legalization of marijuana, inspired by states’ need for tax revenue. He points to expectations that legal marijuana use is expected to generate $134 million in tax revenue for the upcoming fiscal year in Colorado, the first state to allow recreational marijuana. That’s nothing to sneeze at, and Harrison calls the state the “litmus test” for broader legalization. Harrison also cites the expected decline in crime rates and prison populations as powerful incentives to decriminalize marijuana.
The New York Times reports that half the states in the U.S., including some in the conservative South, are currently considering decriminalization of the drug or legalizing it for medical or recreational use. Oregon and Alaska are the likeliest to legalize pot next year. Twenty states now permit the use of medical marijuana now, while Colorado and Washington have legalized it for recreational use.
The legal marijuana market is estimated to grow 64% to $2.34 billion in 2014 from $1.44 billion, according to a recent report by the cannabis investment and research firm Arcview Group.
Wall Street currently doesn’t cover the marijuana market as an industry but once legalization is more widespread, that will be the inflection point when we marijuana investing moves mainstream, says Harrison.
Currently the chatter is mostly about marijuana penny stocks. They are not what Harrison is talking about. He says those stocks are very risky and volatile, and he doesn’t touch them.
But there are some “real” companies generating interest. Harrison cites the cannabinoid prescription medicine company GW Pharmaceuticals (GWPH) as an example. He’s not suggesting the stock as a buy or sell, just as an example he’s traded in the past. The stock has rallied more than 500% since last summer.
Advanced Cannabis Solutions (CANN), soared 62% in a single day when its stock chart was shown on CNBC earlier this week — even though it was a mistake, and the anchor was actually discussing another company in the cannabis industry, called CannaVEST (CANV). Advanced Cannabis Solutions leases growing facilities to legal marijuana growers and dispensary operators. CannaVEST makes hemp-based consumer products.(CORRECTION: An earlier version of this story said that Advanced Cannabis Solutions soared 62% in a single day when it was mentioned on CNBC earlier this week.)
“That’s more bearish than bullish,” says Harrison, reminding him of the bubble levels reached back in Y2K days.
The comparison could cause would-be investors to bristle. Harrison says it’s about investors’ time horizon and risk tolerance. In the bubble of Y2K, everyone was excited about the Internet, he says, and everything they expected the Web to be proved true, but not until after the tech crash.
Harrison says investors should expects ebbs and flows in the marijuana industry. He sees a 10-year horizon with tremendous opportunity that will not be without “potholes, false starts and a lot of risk.” The moral of the story is to do your homework.
Others are more skeptical. Bloomberg reports Mark A.R. Kleiman, professor of public policy at the University of Southern California at Los Angeles, doesn’t “see how there’s money to be made producing an agricultural commodity,” which marijuana is, because once the market becomes competitive, prices will fall.
Other investors recommend avoiding these stocks until marijuana is legal throughout the U.S. Federal law still says marijuana is illegal, though the Obama Administration has said it won’t interfere with the rollout of legalized cannabis in individual states. And though the federal government has said that bankers following Treasury guidelines in providing services to cannabis companies operating in those states won’t face prosecution, many large banks still won’t process funds earned from pot sales.
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