This week, my colleague Brad Briggs suggested I interview him about the rise of the marijuana industry. The article below is a condensed version of our discussion.
Brad Briggs is the editor of Invest daily subsidiary company, street authority. A veteran of the financial publishing industry, Brad manages the team of editors and writers responsible for several premium newsletters, as well as free online content.
When my new book comes out, The Wide World of Weed and Psychedelics, Brad decided to ask me about the increasing legalization and lucrative opportunities of marijuana and its ancillary mind-altering drug industry. I can always count on Brad for his incisive thinking. His questions are in bold.
First of all, John, congratulations on the launch of your book. What brought you to this corner of the stock market in the first place?
This “green rush” is fueling an investor frenzy, reminiscent of the 19th century gold rush. We are seeing tremendous investor excitement over a slew of marijuana games.
The problem is that many of these games are tiny penny stocks that don’t generate profits or revenue. Gullible investors who indiscriminately pile into the pot business will see their money go up in smoke.
I wanted to steer investors towards the right investments in marijuana. Investors who jump on board quality pot ventures in their formative stages reap life-changing profits. But they need to be guided. Hence my interest, and ultimately, my book.
What is the current status of legalization efforts in the United States and what kind of market opportunity are we talking about here?
Marijuana is moving from a countercultural act of youthful rebellion to mainstream capitalism. It is still federally banned, but a growing number of states are legalizing Mary Jane for medical and recreational use.
The latest legalization efforts bring the total number of states with legal adult use to 18, plus the District of Columbia. There are currently 37 states that have medical marijuana laws, including all of those that allow for recreational use. Take a look at this map:
Keep in mind that the growth of the marijuana industry is a global phenomenon. BDSA study firm recently estimated that global cannabis sales reached $30.6 billion in 2021, for recreational and medical varieties. The BDSA predicts that global pot sales will more than double to over $62 billion by 2026.
How Big Is Marijuana In The United States? A new study published this month shows marijuana is more popular with US consumers than food and drink sold by coffee giant Starbucks (NSDQ:SBUX).
In 2021, legal marijuana sales in the United States (both recreational and medical) far exceeded all Starbucks sales in North America. Pot sales in the United States in 2021 reached around $27 billion, while Starbucks sales in North America during the same period were $20.5 billion.
The numbers are all the more stark when you realize that coffee is legal everywhere, while marijuana is banned federally and in several states.
It should also be noted that pot sales in the United States have exceeded Starbucks sales in all of North America. The green mermaid loses to the green rush.
The legalization of psilocybin mushrooms (aka “magic mushrooms”), LSD and other psychedelics is also accelerating globally, for recreational and medicinal purposes. It’s a brave new world, Brad.
By now, our readers have undoubtedly heard of medical marijuana. But what is research Actually say?
Medical marijuana is one of the hottest corners of the biotech industry for investors. The potential of this apparent miracle herb to relieve symptoms of countless diseases, as well as its healing properties, makes biotech companies developing cannabis-based treatments one of the most exciting and potentially lucrative investment opportunities today. today.
Despite the demonization of the herb by authorities for decades, a growing body of empirical scientific research shows that marijuana confers physical and psychological benefits.
There is a significant need for new painkillers and cancer treatments that traditional pharmaceutical giants are not meeting. That’s why Big Pharma invests billions of dollars in medical marijuana research, as well as acquiring small, innovative marijuana biotechnologies.
You just mentioned that cannabis stocks can be “risky”. If so, is the risk worth it?
Stock picking is particularly dangerous in the cannabis industry. Marijuana presents huge investment opportunities, but you have to be careful.
Corporate marketing in the marijuana industry often veers from hyperbole to outright fraud. Many marijuana penny stocks are aggressively promoted, even though they have poor fundamentals.
That’s why, when looking for a stock in any industry, I dig deep into earnings estimates, to look under the hood, so to speak, to gauge the true source of earnings growth. The volatile marijuana industry takes extra effort, but the payoff can be gigantic. My book, The wide world of weed, identifies cannabis stocks that I have recommended in the past that ultimately skyrocketed.
Are there parallel games, called “pick-and-shovel”, in fashion?
I especially like the pick and shovel games on the marijuana boom. These companies are not necessarily dedicated to the cultivation of marijuana or the development of cannabis-derived drugs. These are infrastructure stocks that can be extremely profitable.
You can seek greater security (and profits) by focusing on ancillary businesses that provide infrastructure services for growing cannabis businesses in the recreational or medical segments.
Pick and shovel games can be reliable sources of income, as they provide essential value-added services. Additionally, they typically benefit from a diverse list of clients in several different industries, which insulates them from the volatility inherent in the marijuana business. If you’re looking for above-market growth opportunities without aggressive risk, pick-and-shovel marijuana stocks are great choices. But again, selectivity is key.
A rating of Invest daily Editor: The investment trends that John Persinos just described to Brad Briggs are weathering the recession, rising interest rates, geopolitical turmoil and other risks that currently plague investors. That’s why I invite you to read John’s new book: The Wide World of Weed and Psychedelics. It’s your definitive guide to making money in the booming cannabis and psychedelic industries. Click here to get your free copy.