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In last week’s Money and Markets article, I put you on the inside track when I revealed an industry that “family offices” — the preferred investment platforms for many of the world’s mega-millionaires and billionaires — are quietly funding.
I also explained how marijuana could right now be where alcohol was just before Prohibition was repealed. And how Joe Kennedy Sr. turned prohibition repeal into a goldmine for his family. Indeed, the New York Times has called the marijuana industry “The Next Gold Rush” and Inc. magazine says it’s the fastest-growing sector in the U.S. economy.
If you want further proof that marijuana is going mainstream, look no further than a wealth management conference that kicked off several weeks ago at the Hyatt hotel in ritzy Huntington Beach, Calif. It was an exclusive conference where some of the world’s wealthiest families gathered to explore a variety of money-making opportunities.
Between discussions on tax strategies and building a real estate portfolio, experts offered tips on investing in cannabis to guests who paid upward of $2,000 a pop to soak it in.
That’s because the new rules on pot in California and other states are starting to rouse the curiosity of investors of all stripes.
Indeed, on Election Day 2016, Florida, North Dakota, Arkansas and Montana joined 25 other states in legalizing medical marijuana. That’s right — it’s now possible to buy marijuana with a doctor’s permission in 29 states. That’s almost half the nation!
And get this: Eight states as well as the District of Columbia have now legalized cannabis for adult recreational use.
Source: Governing The States and Localities
www.governing.com
Consider this quote from Forbes magazine:
“The U.S. economy doesn’t spawn an entirely new industry very often, and legal pot may well be the best ground-floor opportunity we’ve seen since the early days of the Internet.”
That’s why family offices are increasingly becoming interested in taking stakes in pot companies. Beyond that, they are dedicating staff to directly support their forays into the marijuana industry.
Driving this push is the perceived lack of returns elsewhere, said Kristi Kuechler, president of the Family Office Exchange’s private-investor center. The average family office surveyed reported a 7.2% return last year plus a shrinking conviction that stocks, bonds and hedge funds will provide stellar returns going forward.
But “the one place family offices think they can still generate double-digit returns is in operating businesses and real estate,” Kuechler said.
And I know from experience that businesses with huge growth opportunities — like marijuana companies and their suppliers — are especially attractive.
Here are the three primary reasons family offices are attracted to the marijuana industry:
- The companies in the pot business and their underlying stock prices are cheap relative to their growth profiles,
- There is the potential to earn eye-popping returns without the use of much leverage, and
- Most importantly, the prices of companies in the marijuana industry don’t move in lockstep with mainstream equities.
And it’s for these three reasons that the pros are getting into pot.
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For example, Founders Fund, Peter Thiel’s $2 billion San Francisco venture capital firm — which was an early backer of Facebook — recently made a multi-million-dollar investment in Privateer Holdings. Thiel is well-known in Silicon Valley as the co-founder and former CEO of PayPal. And Privateer is a private marijuana company that holds the Marley Natural brand, named after late reggae singer Bob Marley.
Brendan Kennedy, the CEO of Privateer Holdings, told Forbes,
“Our investors see … the end of [marijuana] prohibition as inevitable, so they wanted exposure now, they wanted exposure across multiple geographies, multiple industry verticals, and multiple consumer segments.”
Kennedy, like me, is a buttoned-up kind of Wall Street guy. And he’s not a big fan of controversial images like pot leaves.
Branding-wise, he believes the marijuana industry is its own worst enemy. “Everything is named ‘canna-something’ or ‘mari-something,’ with a green-and-black logo and pot leaves,” he says.
Cannabis will be a mainstream product, Kennedy insists. But first, it has to lose the cheesy subculture clichés.
Bob Marley and Willie Nelson couldn’t legalize weed. And increasingly, the Trump administration doesn’t seem to want to touch it.
But with more and more investors professionalizing the pot game, there is a real play here that could be similar to the explosion in the booze business once Prohibition was repealed, as I said last week.
That’s why leading-edge institutional investors are looking to get a toehold in the marijuana industry. And they’re doing so in a way that’s not so different from the other big conglomerates — like P&G, General Mills, Nestlé, Coca-Cola and PepsiCo — and their consumer-facing brands.
With more than 200 marijuana stocks currently available on the publicly traded markets, you have a chance to participate too. But like the institutional investors leading the way, do your homework, be selective and — here’s the big tip — look for a professional management team that’s already guiding the way.
Best wishes,
Bill Hall
P.S. Did you know sin stocks can turn $10,000 into a $1 million windfall? You can still buy these intriguing stocks for a song — a thousand shares for $1,000, $500, in some cases, even as little as $250. And if history proves anything, it’s that paying pocket change to buy rogue companies on the launching pad can produce truly amazing profits. Recently, for example, one of these sin stocks garnered a lot of media attention by suddenly exploding in price. If you had invested $1,000, you could have walked away with nearly $100,000. Click here to read more …
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.
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Mr. Hall,
I need to know your valuable opinion about marijuana stock. The name of the stock is OWC Pharmaceutical research Corporation. The ticker symbol is OWCP. I think this is jackpot in future.
More info:http://www.owcpharma.com
Do you have any suggestions on which specific marijuana stocks to buy? We would be interested in investing. Thank you
The big 3 in Canada and all also trading on the OTC, are Canopy Growth, Aphria and Aurora Cannabis, Canopy has over 600,000 sq.ft of grow space in production and have 50% of the market share, Aphria and Aurora are in construction on 1 million sq ft and 800,000 sq ft spaces respectively. Recreational federally has received 2nd reading and they expect as early as January 2018 mail order sales will arrive and in retail stores before July 2018. The increase in sales is expected to grow from $100 million for the industry last year to about $8 billion/yr by 2020. Almost 80 times or 8,000%
Would like to know the codes of the Marijuana stocks you recommend .
According to Investors Business Daily, the Tobacco lobbyist have bribed Congress and reached an agreement to have Cannabis cigarettes in convenience stores nationwide by 2022. In the mean time, the Prohibition Prison Cartel of politicians, Judges, Lawyers, County Clerks, Police/Prisons and all who make their living waging an illegal, unconstitutional, racketeering driven war upon it’s citizens, continue to destroy lives, break up families and monetize the violence that has turned our streets into war zones more dangerous than Iraq, Afghanistan. Congress has drafted hundreds of punitive laws that flagrantly violates 9 of 10 of the Constitutional Bill of Rights. The safest way to profit from Cannabis may be through big tobacco.
Agree to a certain extent, just don’t want to wash all the babies out with the bath water, and that is why I bought VGR, which sells about 80% of the cigarettes in gas stations and convenience stores…
Well thats true to a certain extent of taking more profits from the street corner thug who sells for gangs to promoting the legal thugs in Corporate America who provide taxes for the biggest street gang, Politicians and their thieving ways. You will see crime actually escalate, WHY because the little street corner little guy is making a few bucks to put their kid in diapers and get second day bread to feed them. When that dries up people in need will loot steal an cheat.. We are not in a progressive economy, it will get worse.
Governments are legalizing this for tax dollars. It’s unconscionable. I wouldn’t invest for any amount of money.
yield and equity markets going in opposite direction what gives with your primary indicator ?
Bill,
How does a novice stock investor navigate their way to starting a small trade account in cannibus?
Where the moral weakness lies on the Prohibition side, is the suppression of a discovery that some ingredient in cannabis smoke, prevents cancer.
The discovery happened in 1974.
Scientists paid by NIDA, the National Institute on Drug Abuse, were hoping to prove that the toxic mixture of carcinogens that get produced when a greasy cannabis leaf is lit on fire, was a potent cancer hazard. And they found, to their surprise, that the cancer hazard was far less, than when a tobacco leaf was burned. The most powerful carcinogen known to science, benzo[a]pyrene, is present in both kinds of smoke, whether from cannabis or tobacco. (In fact, it forms in all smoke. Another reason I don’t eat Cajun-blackened food…I see it smoldering on the grill and think of all the carcinogens the chef is making.). Researchers concluded that something in the cannabis plant was boiling out of it, mixing with the smoke, and inhaling the combination was causing fewer lab rats to get cancer, than when they inhaled tobacco smoke.
Gerald R Ford was informed of the discovery. He left orders that private industry should be allowed to investigate the discovery and learn from it. However, the industry that actually took action wasn’t Pharma firms, but cigarette manufacturers.
Cigarette makers launched a research effort aimed at creating a Safe Cigarette, one that arguably did not add measurably to cancer risks.
Prohibitionists sought to tar the effort with the assertion that cigarette makers were going to add a marijuana chemical to cigarettes, and that there was something bad about this.
Not a lot has actually been published, about the Safe Cigarette project, or about science research that may have been jointly funded by cigarette makers and by NIDA, seeking to learn about what was in the cannabis plant that caused the 1974 discovery.
After 4 years of the Carter Administration’s bungling, the Reagan Administration launched some violent new escalations of the Drug War, most notably including the Asset Forfeiture laws, that enabled police to seize all the money and machinery belonging to a business, on mere suspicion that the business dealt in prohibited drugs. This law slammed shut the door on all cannabis research, because a Pharma company could not grow one cannabis plant in their own greenhouse for research purposes, unless it got a DEA license to do that, or every one of it’s many factories could be seized by the DEA and sold, leaving the stockholders with nothing. And DEA, seeing the cash windfall ahead, of keeping the Drug War in full force, only gave those research licenses to scientists who agreed to publish findings showing that there were unknown dangers to cannabis use, so as to justify continuing the Drug War. This is, of course, junk science. Scientists don’t know what they’re going to find, if they’re seriously studying new things…the point of doing the research is to learn new facts that nobody knows or can guess at.
Then about a decade ago, some researchers in Spain repeated the 1974 experiment and got the same result. Spain has no DEA. The Netherlands, where the cannabis trade was partially legalized, had available an assortment of legal cannabis products that the researchers could get. Israel, where the Rabbinical Court could step in and show that “kanah bohsem”, meaning cannabis, was mandated by religious laws, to be used as a medicine called the Holy Anointing Oil, acted. Israeli researchers grew the plant in quantity, extracted it with solvents, and separated the extracts by chromatography to identify upwards of 400 chemical substances present in trace amounts in the cannabis plant. Animal tests were done and patent applications written. And we’re now on the verge of seeing several new drugs, made from cannabis ingredients, approved for prescription.
This undermines the legal basis for US cannabis prohibition.
Cannabis is prohibited at the federal level because it is allegedly harmful and medically useless.
The manufacture of useful medicines from it abroad, makes it medically useful. To make the useful medicines demands use of the plant. Accordingly, the plant is useful and not useless. This demands that cannabis be removed from Schedule One, a list of dangerous drugs that are harmful and useless, and put on a different schedule or else on no schedule at all, depending on whether it’s harmful and how much so.
Where the US Congress could be somewhat helpful, and still behave in it’s usual cowardly fashion, is to amend the language of the Controlled Substances Act and remove mention of cannabis. The writers of the 1970’s law, believing cannabis to be useless and dangerous, used it as an example of a drug that belongs on Schedule One. Striking the mention of cannabis from that statute, and leaving to regulators the task of assigning which drugs are dangerous and useless, versus which ones have dangers but are useful, would be an easy, low-risk way for Congress to pass the buck.
Libertarians, of course, would simply repeal the Controlled Substances Act and leave it up to doctors and patients to decide whether the dangers of a drug outweigh the potential benefits of using it. Libertarian-leaning voters are becoming hugely influential, so much so, that they cannot be shamed into silence any longer. Thus, the milquetoast solution of modifying one sentence in the Controlled Substances Act, allowing regulators to decide how to schedule cannabis, is one that the Congress could actually pass to avoid the problem.
What no political career in Washington can survive, will be the discovery that by using some 1970’s analytical-chemistry technology, a potent anti-cancer agent was found in cannabis and isolated. The day that happens, everyone connected with cannabis prohibition since 1974, will be seen to have obstructed research that would have found the agent sooner and saved millions of lives globally. Those who fought to repeal prohibition will be seen as heroes. Those who fought for more prohibition will be seen as killers.
A milquetoast buck-passing solution, at least offers the politician an option at having a career, the day that anti-cancer agent is finally found.
How can I talk to a local agent face to face in Pascagoula Mississippi 39568 about marijuana stocks to buy from $500-$1000 investment. I know Lowes PVC pipe and lighting what are the other items to invest in?
i can go $ 250 down?
Been following the different sectos of the marijuana industry for over a year now and am glad the power investors like M & Ms are getting into the game. Now it’s going to get confusing for I’m sure each of you will be suggesting a different stock, supplied of course as FREE after joining something….
Whatvisvthe minimum investment for marijuana?
Yes I feel this is an explosive investment area. But need your guidance. This is why I subscribe to your newsletter. Others offering advise. Waiting on your recommendation. Thanks
I would like some answers to the submitted questions
So, how far down the road is it until you are going to be able to give us some recommendations on what marijuana stock to purchase.
I recommend Kush Bottles (KSHB). Strong balance sheet. Increasing profits and revenues. Growth through sales and acquisitions. No debt. Really strong company.
I don’t have a portfolio or a broker but I would like to get into buying penny pot stocks.what do I do?
Mr. Hall
I have read your June 12, 2017 “Marijuana Fever” Safe Money report and I have done some preliminary investigation into the companies that you wrote about.
However, during your entire analysis of each company you state “Buy XXXX company based on my signals in the Safe Money Report.”
Have you sent buy signals on any of the companies and if so where was it posted. I may have missed an alert message from you.