I’ve been kicking around Silicon Valley for more than 30 years now.
And during my stint here, one thing has always been true…
Any time you went to a rock show in San Francisco – “the city” – no matter if the band was an aging act or a fresh up-and-comer, you could count on one thing…
As soon as the lights went down and the band started up, you’d smell marijuana. Not just a hint of cannabis, mind you, but a thick fog of pot smoke wafting through the crowd.
From what I’ve been told, it’s been a permanent – and smelly – fixture of the rock music scene here since long before I arrived. San Francisco, of course, has been the epicenter of the counterculture since at least 1967 and the Summer of Love.
That’s why two recent concerts my wife and I attended in the city really jumped out. Over the course of two evenings at large music venues, not once did we get a whiff of any marijuana.
It was weird.
However, my recent stink-free nights out are explainable – in fact, they serve as a barometer for the high-octane growth of the legal cannabis market. (I’ve been talking about the profit potential of marijuana – and showing my readers the best pot stocks to invest in – for years in my premium Nova-X Report service. To find out more, click here.)
And they point to a profit opportunity in the making.
Check it out…
An Odorless Night Out
My wife and I are usually among the oldest folks we see at the rock shows we attend. As boomers, we’re easily twice the average age of the fan base for the acts we follow.
That’s not too surprising, as we’re heavy into modern hard rock. I’m talking about bands like Adelitas Way, Shinedown, Disturbed, Black Stone Cherry, Sixx:A.M., Papa Roach, and Shaman’s Harvest.
Several weeks back, fortune smiled on us, and we were able to see several of our favorite bands in two nights during the same week. We went to the Great American Music Hall to see Pop Evil with two opening bands, and later to The Warfield to see Asking Alexandria and Black Veil Brides.
About 20 minutes into the first concert, I turned to my wife and mentioned I hadn’t smelled any weed. Nor had we seen anyone light a joint or use a pipe.
And the same scene played out just two nights later…
Don’t get me wrong. I’m not saying no one was using cannabis. In fact, I suspect the opposite was true – that plenty of folks were.
After all, California made recreational use legal on Jan. 1 after 20 years as a medical-only state.
Here’s what this all means…
From Flower to Wax
The use of marijuana is on the rise.
It’s already a $10 billion juggernaut, but forecasts show that the market will be worth $75 billion by 2030.
To put that in context, 2030’s legal cannabis market will be roughly 25% bigger than today’s $60 billion U.S. wine market and just a tad smaller than today’s $76.4 billion U.S. soda market.
From my personal observation here in California, and from folks in the industry with whom I talk, much of that will be for products other than traditional “flower” – the dried plant form of cannabis that people smoke by joint, pipe, or bong.
What we are seeing is the rise of what I call the “precision dose” market. Simply stated, folks are moving away from smoking pot in favor of edibles, vaporizing oils, and other formulations, like “wax.”
Though they can’t at present cite meaningful data, dispensaries report growing demand for both vape cartridges and edibles. That says a lot, because both forms may cost two or three times a standard 1/8 an ounce of weed, which can sell for around $45.
Part of this no doubt stems from the fact that more new marijuana users are choosing dosing methods that are healthier than smoking.
But the next generation of pot products don’t just come smoke free – they’re also very exact.
Indeed, a vaporizer pen made by the firm Dosist is a great example of just what I’m talking about. It provides the user with exactly 2.5 milligrams of cannabis with each hit, with three full “vapes” making up a full dose.
Including taxes, a 200-vape pen can cost $115. Once it’s finished, you just throw it away.
To make sure the user is being exact, the pen provides three warnings for each hit. The pen lights up, provides an audible tone as well as “haptic” feedback. In other words, the pen beeps and then makes your lips tingle when you’ve attained the proper dose.
In 2017, the e-cigarette and vaporizer industry was worth $9.5 billion, according to Visiogain. By 2025, the e-cigarette and vaporizer market will be worth $61.4 billion, according to Business Insider. That’s a 546.31% potential gain in just eight years.
Kiva Confections is known for its high-quality chocolate bars. Its blackberry-flavored product is marked with clear lines denoting 5-milligram doses. And a sea salt and chocolate truffle from Stokes Confections contains 10 milligrams of medical-grade cannabis.
California’s tough new recreational laws are one reason for such precise doses – but they’re not the only one.
In fact, if you’re of a certain age, you and your fellow baby boomers are helping to lead this trend…
A Profitable, “Booming” Demographic
As marijuana goes mainstream, users are looking to be both more discrete and more precise in their dosing.
Just look at what’s going on with baby boomers. This is the cohort of Americans born between 1946 and 1964, totaling more than 72 million. This is the very generation behind the Summer of Love.
But many of them threw out their bongs years ago as they embarked on careers and began to raise families. Now, with the rise of state-level legalization and healthier options, they are using cannabis once again.
A recent report by Ohio State University found that as much as 70% of the 50-and-older demographic are using some form of alternative medicine, which includes everything from herbs to acupuncture to medical marijuana.
Many boomers see cannabis as an alternative medicine that helps with everything from anxiety to insomnia.
And this is a powerful group of consumers. The American Association of Retired Persons says boomers account for two-thirds of U.S. disposable income and are set to inherit $15 trillion dollars in the next 20 years.
In other words, they have plenty of money to buy the very best in cannabis.
Meantime, we’re also seeing the rise of female buyers, now that getting cannabis is no longer an illegal activity, with all the inherent risks that poses.
A 2017 survey by Eaze, a San Francisco marijuana delivery app firm, says women are the fastest growing group of new pot users, based on its orders.
Of the company’s nearly 100,000 Bay Area patrons, nearly one-third – just over 31,000- are women. That’s up from about 25,000 the previous year.
Bear in mind, the survey was taken before recreational use became legal in the Golden State. Though I don’t have the stats at this point to back it up, I believe female buyers will continue to drive the market.
A report from the Pew Research Center says 21 million American women over the age of 18 who earn $75,000 or more per year have tried cannabis. That survey was taken nearly three years ago, long before we reached critical legalization mass in the United States, where 30 states now allow some form of legal cannabis use.
The U.S. medical marijuana market alone is expected to grow from $4.67 billion in 2016 to $13.22 billion by 2025. That’s a 183.08% increase in nine years.
I believe these three factors – boomers, female buyers and precision dosage – show that the biggest gains are still ahead.
And as my experiences show, many of those gains will come in California.
Like I said, on Jan 1, California completely legalized cannabis for medical and recreational use – promising to spark a $20.2 billion industry in the Golden State alone.
I recently shared my insights on California’s total cannabis legalization, and delivered details on the huge gains you can enjoy… if you learn how to take advantage. By getting in on the ground floor of these exceptional opportunities, you could have the chance to pocket life-changing windfalls.
I’ve set my sights set on three stocks that I expect to skyrocket now that California’s gone fully legal. Get all the details here.
Meanwhile, I’ll continue tracking the industry’s amazing growth and letting you know of exciting new investments as they come across my radar screen.
So keep checking back here.