Get Ready to Step Out of Your Investing Comfort Zone

If you are a regular reader of my weekly Money and Markets columns, you know that as a money manager for ultra-wealthy families I am a pretty buttoned-down kind of guy.

What’s more, as the Captain of the Safe Money ship, you know that I’m also a notoriously safety-conscious investor.

So I spend a lot of time focusing on the big-chip stocks that can grow through thick and thin. And I’m well versed in powerful market hedges that rich investors love.

That’s because the super-rich are not amused when you “get too creative” with their hard-earned investment capital.

But there are rare circumstances when they are willing to step outside of their traditional comfort zone and take additional risk for an outsized return. And that’s when they see a chance to get in on the ground floor of a brand-new opportunity that has the potential for large-scale profits.

After all, that’s how many of them made their money … by taking a big entrepreneurial risk and building a business.

And right now, it’s highly likely that we are on the precipice of one of those opportunities.

In this article, I’m going to get you in on the inside track and reveal to you the industry that the New York Times has called “The Next Gold Rush” and Inc. magazine says is the fastest-growing sector in the U.S. economy.

It’s a sector that many of my clients are asking me about. And it’s one that one-stop “family offices” — the investment platforms for many of the world’s billionaires — are quietly funding with millions of dollars under their management.

But before I tell you what this industry is, let’s look back in the history books to get a sense of why this rapidly growing industry has caught the attention of some of the world’s wealthiest families.

Imagine for a moment that you could go back in time to 1932; the year before the 21st Amendment to the U.S. Constitution was ratified, repealing Prohibition (and the 18th Amendment).

What would you do if you knew the federal government was set to legalize the production, transport and sale of alcoholic beverages? What sort of investment opportunities might you find? How would you invest your money?

You could do what Joe Kennedy Sr. did. That’s because he had read the handwriting on the wall, and he could see that the public was fed up with the federal prohibition on alcohol.

So, he made two brilliant moves that would cause the Kennedy family fortune to explode to over $1.6 billion in today’s dollars.

First, Joe Sr. established a new firm called Somerset Importers — apparently named for Boston’s private Somerset Club, which excluded Irishmen like him. The firm would soon become his piggy bank for cashing in on Prohibition’s imminent demise.

Then, realizing that Prohibition had shut down all the distilleries in the U.S., he set out on a steamship to Great Britain in 1933. There, Joe locked up the rights to import British-made whiskey and gin – by working his connections to Winston Churchill, the realm’s finance minister, who would soon become prime minister.

That’s right, Joe Kennedy pulled off an international coup when he landed the lucrative British rights to distribute Haig & Haig Scotch whiskey, Dewar’s, and Gordon’s gin to thirsty customers in what was soon to become the no-longer-dry United States.

When Prohibition did finally end two months later, in December 1933, Kennedy seized his chance. With this new arrangement, Joe saw his Somerset business soar, selling 150,000 cases of Scotch whiskey in the first full year.

“We have done surprisingly well with contracts,” Joe wrote his eldest son, Joe Jr.

When Kennedy sold the Somerset franchise around 1944, he earned over $100 million in today’s money on a reported investment of only $118,000.

Fast-forward to 2017. We could be in a similar, if not exactly parallel, situation regarding a similarly controversial product.

Indeed, MARIJUANA could right now be where alcohol was just before Prohibition was repealed. And just like alcohol, marijuana is potentially a huge business in the U.S.

If you’re looking for a new way to make a profit, maybe you should turn over a new leaf — a marijuana leaf.

Here’s why: According to reputable market research reports, legal marijuana was a $3.4 billion business in 2015 in the U.S. In 2016, the U.S. legal marijuana market doubled to $7.1 billion. And two major studies show that the legal marijuana industry will top $40 billion in the U.S. over the next five years.

Now, consider this: In 2012, there were 712 legal marijuana dispensaries in the U.S. Today, there are over 5,000. That’s a 600% increase in just five years. With that kind of growth, you’d expect some massive money-making opportunities. And that’s why we’ve already seen some enormous gains in some publicly traded marijuana stocks.

And now, we have Wall Street private equity — one of the preferred investment vehicles for wealthy families — moving into the pot business.

For example, the private-equity firm Seventh Point LLC — named for the seven points of a cannabis leaf — aims to raise $75 million this year, according to CEO Steve Gormley, who has over 15 years of experience in the private-equity business.

“It’s like a floodgate,” Gormley said in an interview with Business Insider. “We are oversubscribed [raising more money than intended] in our first two funds. I haven’t seen anything like this in my career.

“We’re getting more excitement than we can handle. I cut my teeth in the dot-com era. I lived through the housing bubble. This is something completely unto itself.”

He added: “Now, we’ve got venture capitalists and hedge-fund operators and senior private-equity managers coming in as individuals.”

Look, I want you to know that I am NOT on a crusade for legalized pot. Personally, it’s not my thing.

But as a professional investor with more than 30 years of Wall Street experience, I’ve been trained to set my personal biases aside and to take a dispassionate view so I can effectively evaluate money-making opportunities for my clients.

Joe Kennedy made his family fortune by being a shrewd businessman and a savvy investor when he capitalized on the repeal of an unpopular law.

Unfortunately, I can’t rewind the clock so you can go back and profit with Old Joe. But I can tell you about what I believe may be the next best thing and that’s the marijuana industry.

Keep an eye out for future Money and Markets articles where I’ll get into more specifics about this explosive money-making opportunity and how you can get in on the action along with some of the world’s wealthiest families.

Best wishes,

Bill Hall

P.S. If you’d welcome a way to build massive wealth in a very short period of time … and if you like the idea of doing it with renegade companies that are about to go “mainstream” in a big way, this short report will probably be a god-send for you. Read more here …

Bill Hall is the editor of the Safe Money Report. He is a Certified Public Accountant (CPA), Chartered Financial Analyst (CFA) and Certified Financial Planner (CFP). Besides his editorial duties with Weiss Research, Bill is the managing director of Plimsoll Mark Capital, a firm that provides financial, tax and investment advice to wealthy families all over the world.