When we spoke on January 25, I noted that a major drugmaker just made a huge cannabis merger. to fill out its franchise of cutting-edge medical science. Today, I'm following up to let you know about another big cannabis breakthrough - it just...
The market has led us on a wild ride this year. It dropped over 35% in February and March, and in only a matter of months, some indices were already hitting all-time highs again. Just look at the Nasdaq Composite, which is up 40% this year, even with the drop.
But the most interesting moves in the market this year have been from private companies entering the public markets.
With a medical program launching in 2008, the people of Michigan had a jump start in learning about the health benefits of cannabis while growers had time to perfect their craft.
By the time recreational sales started on December 1, 2019, you had an educated consumer base who could buy some of the best cannabis in the country. And Michigan smashed it out of the park, with almost $440 million recreational sales in its first year – more than both Nevada ($425 million) and Massachusetts ($420 million).
I visited Michigan in November because I wanted to see this boom for myself, which led me to one startup in particular that is accounting for 12% of all the sales in this state.
Cannabis companies have just found a backdoor strategy to go public and place their shares right into your hands.
What they’re doing is forming a special-purpose acquisition company (SPAC), also known as a “blank check” company. Through a SPAC, some of the smartest people in any room – lawyers, finance wizards, and startup founders – raise money through an IPO. They will then use that money to buy a company or several companies.
There’s a little bit of catch with this because you won’t know what the SPAC is going to buy until it makes an acquisition. It won’t list any specifics in its paperwork.
My friends and colleagues at the National Institute for Cannabis Investors are right to emphasize this point because it shows the massive profit opportunity that is ahead as illicit sales turn into legal sales and, ultimately, profits for publicly traded companies.
In 2018, New Frontier Data projected that there was over $86 billion in cannabis sales in North America. As a reference point, only $10.8 billion of that was legal.
To make a dent in the illegal markets, you need two things. One is education. When more people learn about why it’s better to turn to safe, regulated, and legal markets, you send cannabis consumers to dispensaries instead of dark alleys.
If you’ve followed along with me for even a short time, then you already know that I have a tendency to make bold predictions.
Here’s the thing. I’m convinced – and I have the track record to prove it – that to consistently crush the market, you have to be willing to buck the in-crowd on Wall Street and in Washington.
For me, it’s all about innovation. I always say that the road to wealth is paved with tech, and that’s why I’m always excited about bold new sectors that mainstream big investors might still be cautious about. I expect that 2020 is going to be an outstanding year for Bitcoin and other cryptocurrencies. Along with that, I’m expecting big things from the legal cannabis sector in this coming year.