As a writer, I sometimes find it nearly impossible to avoid a pun when they come so fast and easy. But after reading over marijuana investing articles in the past few months, it has become completely unbearable…
- Marijuana Legalization Has Lit Up
- These Stocks Pot Shares Rally 21% to 1,700% as Speculators See Green
- Marijuana Stocks Show ‘High’ Hopes
- Pot Penny Stocks Smoking on Rise of Legalization
Groan…
Such headlines are sillier than a stoned teenager watching Cartoon Network, so I’ll spare you the terrible pot puns and get right to the point: marijuana legalization could make you very rich.
Marijuana stocks are gearing up to be huge in 2014 and beyond. Some investors have already banked gains of over 2,000% on some budding marijuana stocks. And as more and more states legalize both medical and recreation weed, those profits are going to keep on growing.
Here’s why grass is greener than practically anything else you can invest in right now…
I’m not going to bother with any ethical issues here. Whether you support pot smoking or not, this industry is going to be massive.
For better or worse, marijuana is immensely popular. And its popularity is increasing each and every day…
A recent survey revealed that 7.3% of Americans 12 or older regularly used marijuana in 2012, up from 7% in 2011. That’s 7.6 million Americans that light up almost every single day of their lives. Countless millions of others use it occasionally…
And more people use marijuana than are actually estimated (in no small part because people don’t like admitting incriminating things about themselves). The real number of smokers has been estimated as high as 50 million.
Most telling is that the new generation of teenagers is smoking more pot than ever. Today’s teens are lighting up 80% more than they were in 2008. In fact, more teenagers smoke pot than cigarettes… and you know what a profitable business cigarettes have been — even after they were proven to give you cancer. Marijuana has no proven health effects anywhere near that serious.
It stands to reason that as more and more states open up to legal weed, this new crop of Americans will be buying it up in record numbers.
“The demand for marijuana is insatiable,” according to Bruce Perlowin, CEO of Hemp Inc. (HEMP). “It’s a feeding frenzy for the birth of a new industry.”
The trend is clearly growing in favor of marijuana growers and distributors. You can choose to turn up your nose, or you can start cashing in on the feeding frenzy while it’s still on the way up…
A Sticky Green Market
All told, the legal weed industry could be worth between $35 billion to $45 billion a year.
In the first week after Colorado legalized recreational marijuana, customers shelled out $5 million to get their Rocky Mountain high. They sold a million bucks’ worth on the first day alone! And each of those sales comes with a 10% sales tax…
Washington State imposes a 25% excise tax every step of the way: production, processing, and sales. And that’s on top of the 8.75% sales tax.
Colorado estimates that the booming industry will pull in around $67 million in tax revenue — each and every year. I doubt too many other states will want to pass up that kind of tax revenue, so more and more will follow suit.
Twenty states have already legalized medical marijuana use: Alaska, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, and Washington State.
This list will also grow in the years to come…
So how do you get your share of this cash crop?
Bong-Rattling Profits
There are a few different ways to play legal weed: You could buy producers, retailers, or auxiliary companies.
But first, a word of warning…
The major problem right now is that like most industries in their infancy, the bulk of these opportunities are in unproven — and possibly completely phony — penny stocks. So we’re looking at more proven companies that have a few years of operation and a decent market cap.
That being said, this is still a very volatile market, so be careful.
Medbox Inc. (OTC: MDBX)
Upon first glance, this looks like a run-of-the-mill vending machine:
But if you take a closer look, you can see it is filled with bags of marijuana and even edible snacks like brownies and soda that contain weed. It was invented by Bruce Bedrick, a chiropractor and occasional weed smoker.
The stock has ping-ponged between $8 and $100 over the past year, so it’s one of the more volatile companies out there. But the idea is great. You know what marijuana smokers love more than getting high? Getting high easily, anonymously, and conveniently. Medbox takes care of all of those in one fell swoop…
If you think stoners were raiding the vending machines before, wait until they get a load of this…
Right now, the boxes are only allowed in state-licensed dispensaries. But when legal marijuana becomes more widespread, I’ll bet you’ll be seeing Medboxes crop up all over the place. By then, the stock’s volatility should have chilled out, man.
Medical Marijuana Inc. (OTC: MJNA)
This is a pure marijuana play. Medical Marijuana Inc. produces patented cannabinoid products for the pharmaceutical, nutraceutical, and cosmeceutical industries. It is the first publicly held company vested in the medical marijuana and industrial hemp markets.
Some of its products include cannabinoid gum, organic hemp oils, and other products used for treatment of ailments like pain and nausea.
What’s more, the stock trades around an average of 6.2 million shares per day, which makes it one of the most heavily-traded marijuana stocks. It has a market cap of $122.58 million.
While it is currently focused on the medical marijuana industry, full-scale legalization will simply expand the market for its products.
GrowLife (OTC: PHOT)
GrowLife provides equipment for larger growers. It also has a portfolio of companies that focus on the growth and cultivation of marijuana. Here are some of its holdings:
- GrowLife Hydroponics provides gardeners with all the tools they need to “excel at their craft.”
- Phototron is a 25-year-old USA manufacturer of plant-growing systems complete with their own self-contained attractive cabinet. It also has a full line of accessories including nutrients, media, timers, and controls.
- Stealth Grow is the leading USA-based manufacturer of Hi-Power LED lights for indoor growing.
GrowLife is also rather thinly traded compared to big name stocks, but it still trades over 13 million shares a day — pretty good for the sector. GrowLife stock is up almost 80% in 2013, but like the rest of these stocks, it’s still quite volatile.
It sports a $206 million market cap.
Smoke and Mirrors?
There is no denying it: Marijuana will continue to get more popular, and there is little left to stop its progress.
Public opinion on the legalization of weed continues to skyrocket. Now, 55% of Americans support full-scale legalization. That’s up from 16% in 1987, 26% in 1996, 34% in 2002, and 43% two years ago.
While it is indeed a volatile sector, with risk comes reward. Just take a look:
- Hemp Inc. (HEMP) is up 205%.
- Advanced Cannabis Solutions Inc. is up 144%.
- GreenGro Technologies Inc. (GRNH) has soared 1,714%!
But if you are scared to try your hand at these thinly-traded over-the-counter markets, you could always invest in larger complementary markets. Like Frito-Lay (owned by Pepsi NYSE: PEP) for instance…
I cannot help but imagine we’ll see sales of Doritos skyrocket when legal weed is available all over the country.
Or maybe those profits are already baked in…
