The move to decriminalize and legalize cannabis is one of the great social sea changes of our age.
Consider this: In the United States alone the sanctioned market for cannabis will reach $7.1 billion this year, up from $1.5 billion in 2013 – 373% growth in barely three years.
By 2020, the market for legal marijuana will top $22.8 billion. Investment bank Ackrell Capital predicted in March that between 2016 and 2029 the market for marijuana will reach $100 billion – 1,308% growth.
Those huge numbers hide the fact that this market is still in its infancy.
After all, marijuana is still illegal in most of the United States. For that reason, there’s no accurate way of really knowing just how big this market could ultimately be.
However, one big-name tech company is positioning itself to profit as medical and recreational marijuana goes mainstream.
You could consider it an “entry point” into the wider world of the very young field of legal marijuana investing. This stock is about as safe and solid an investment as you’ll find – and it pays a generous dividend.
Still, this is a company that’s again on the rise thanks to its big moves in marijuana and other high growth fields – and so you can expect significant double- and even triple-digit gains from this “marijuana major” in a pretty short period of time.
It Gets Even Bigger Nov. 8
Some estimates place the number of occasional marijuana users in the neighborhood of 50 million people. As many as 7.6 million indulge on a daily basis.
Clearly, those are huge numbers.
Yet more and more places are legalizing cannabis. On Nov. 8, Election Day, people in 20 U.S states – maybe even you – will vote on marijuana legalization. And once that happens, this market could boom into the stratosphere.
This means you now have a rare opportunity to get in on the ground floor of this nascent industry and to acquire a stake a blockbuster company that could rise quickly as the market expands.
In a move that USA Today described as “defining” and a “watershed industry moment,” tech giant Microsoft Corp. (Nasdaq: MSFT) revealed in June that it was dipping its toe into the legal marijuana trade.
Microsoft is getting in on the software side of the business. The company is partnering with a California startup called Kind Financial to help ensure that cannabis companies stay inside the legal lines.
For its part, Kind “offers a range of products, including ATM-style kiosks that facilitate marijuana sales,” according to The New York Times. And it created the software that Microsoft is about to begin selling.
And so, no, the Redmond, Wash.-based tech icon will not be touching even a single cannabis seed.
Instead, it will work with Kind’s “government solutions” division to make available to state and local governments the software they need to develop ways to track compliance. The software will allow governments and entrepreneurs a way to monitor the distribution of cannabis “from seed to sale.”
David Dinenberg, Kind’s CEO, told USA Today that “Thanks to Microsoft’s huge reach, it’ll be easier for us to target every state with our compliance solutions. It’s a win-win for both of us as more states look to legalize medical marijuana.”
This move is as significant from a symbolic standpoint as it is from a purely financial and business point of view. In one swoop, Microsoft has done nothing less than legitimize the cannabis trade in the eyes of many.
Matthew A. Karnes, an advisor to the cannabis industry, told the Times that, “It’s very telling that a company of this caliber is taking the risk of coming out and engaging with a company that is focused on the cannabis business.”
Dinenberg was even more hopeful: “I would like to think that this is the first of many dominoes to fall.”
The Other Dominoes
There are signs that other major tech companies recognize that marijuana is moving into the mainstream.
For example, Oracle Corp. (NYSE: ORCL) is working with the state of New York to help administer its Medical Marijuana Program.
And in May, the world’s largest drugstore chain, Walgreens Boots Alliance Inc. (Nasdaq: WBA), published a 650-word blog post about medical marijuana. Titled “What Is Medical Marijuana? Clarifying Clinical Cannabis,” the post answered common questions about medical marijuana and even told readers what to do to if they wanted to obtain it.
It’s easy to read that blog as an opening gambit in what could become an all-out effort on the part of Walgreens to eventually lobby for the right to dispense cannabis.
But Microsoft has stepped forward publicly and unambiguously. It is now a player in the legal marijuana trade…
Only in Seattle
The company will begin by marketing Kind’s software to government employees, but it hasn’t ruled out marketing through dedicated cannabis events. The Microsoft logo flying proudly at a conference packed with marijuana growers and distributors would be a huge leap forward for the industry.
The software that Microsoft will market uses the company’s Azure platform, which allows users to build and manage applications through Microsoft’s data centers. The platform was designed to be compliant with Health Insurance Portability and Accountability Act (HIPPA) regulations.
“Microsoft is helping us support governments in their expansion of cannabis legislation,” Dinenberg told CNN Money in June. “They’re experienced at providing platforms for government regulation. This is something Microsoft does every day of the week with other businesses in other categories.”
Azure has been growing like a weed since its launch in 2010. For its second quarter of fiscal 2016, Microsoft took in $9.4 billion from its cloud business, much of it driven by a 140% increase in Azure revenue.
So Microsoft’s move into the weed space spotlights the way it’s leveraging the cloud to propel growth. It’s a smart strategy: Market researcher Forrester estimates the cloud market will grow from $55 billion in 2014 to $241 billion by the end of the decade.
Weed is just the latest development in the Microsoft’s exciting cloud story.
The company has a market cap of $418 billion and annual revenue north of $90 billion – so we’re not looking for the stock price to triple thanks to marijuana.
That said, it’s worth noting that mainstream analysts already have a high-water target of $70 on the stock – a gain of 21% from yesterday’s opening price of $57.81… 35% up from when I made it part of the New Internet Dream Team… and nearly 75% north of where I first suggested it back in September 2013.
As marijuana moves into more and more U.S. homes and doctor’s offices, that projection could turn out to be conservative. I can readily believe the stock could reach $80 to $85.
Not too shabby, considering that Microsoft also pays a respectable 2.75% dividend yield. That’s nothing to sneeze at an era of fast-approaching negative interest rates.
Now, like I said up top, this trend is still in its infancy, and so most would-be marijuana investors are getting in on the hundreds of small- and micro-cap companies that are behind growing, managing, and selling this newly legal commodity.
Any one of them could end up a blockbuster – and so they’re the only way to make a true killing in marijuana.
The job now is to sort through all these potential cannabis opportunities to find the best ones.
That’s where I come in…
I’ve spent the past six months exhaustively researching every aspect of this market, literally examining hundreds of marijuana companies out there – and I’ve put together a Special Report that covers all this… and a lot more.
I’ve whittled those hundreds down to what I believe are the 30 best ways to invest in the exploding cannabis market before the real growth takes place.
To get my guide to “marijuana millions,” just take a look here…
- Walgreens on Tumblr: What Is Medical Marijuana? Clarifying Clinical Cannabis.
- Strategic Tech Investor: The “Earnings Recession” Just Gave Us Two Big “Buy” Opportunities.
- Strategic Tech Investor: Three More Ways to Profit Playing 2016’s New Internet “Dream Team.”
- Strategic Tech Investor: Buy These “Cash is King” Tech Stocks Before the Feds Taper.