The Biggest Opportunity of the Decade
Controversial or not, the marijuana trade was hot in early 2017.
Related stocks were up as much as 600%.
- GW Pharmaceuticals (GWPH) jumped from $90 to $120
- Kush Bottles (KSHB) soared from $1.25 to a high of $5
- OrganiGram Holdings (OGRMF) jumped from 80 cents to $3.40
- Canopy Growth (TWMJF) rocketed from $2 to a high of $14
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There was no denying the strength.
We had to consider that in 2016, the U.S. marijuana industry generated revenue of $6.7 billion. By 2020, it was expected to rocket to $19 billion. And over the next 10 years, it was expected to balloon to $50 billion. So there was plenty of reason for excitement fundamentally.
Plus, it was tough to ignore the potential economic impact.
For one, marijuana was expected to be a $5 billion boon to California’s economy.
Colorado’s marijuana industry just saw its 11th consecutive month of seeing $100 million sales. In the first four months of 2017, the state saw sales of $492 million – 27% higher than the first four months of 2016. In Oregon, analysts project the state could see $156 million in sales between 2017 and 2019, too.
In Nevada the projection is a whopping $6 billion, while Massachusetts is estimated to see around $1.5 billion in gross sales the first year. Maine is projected to enjoy $290 million in gross sales annually. In Florida, legalization could generate up to $2 billion in annual sales. North Dakota could see $75 million just starting out.
Even better, more than half of the states in the U.S. have now approved its use or possession with advocates pushing for its legalization in Rhode Island, New Jersey, and Delaware, where one state lawmaker pledged to introduce a recreational-marijuana bill this year.
New Mexico already allows for its medical use but could expand laws, as well, especially to help reduce the state’s massive budget deficit. Within the first year of such sales, estimates say the state could see $60 to $70 million added to the state budget.
Even Canada is fueling the boom, too.
By 2021 analysts say Canada could have nearly four million recreational marijuana users, creating a monstrous $4.5 billion industry. The industry could balloon to $8.7 billion shortly after, as marijuana retail sales just in Canada are likely to surpass beer, wine and spirit sales combined. That’s big money.
Down the line, it could be a $22.6 billion industry once you factor in security, transportation and even the testing labs. It’s so big that Canadian growers may have to produce up to 600,000 kilograms of marijuana every year – just to keep up with demand.
In fact, when Canada does legalize its use, it won’t be able to keep up with demand.
According to Ottawa Citizen, medical cannabis growers now supply 170,000 patients. Once approved for recreational use, the industry will not be able to keep up with the demand from between four and six million Canadians that are expected to use it.
Short supply and heavy demand means profits for related companies.
The fundamental picture is explosive, as is the technical one. For example, if we look at GW Pharmaceuticals (GWPH), as of June 2017, we can clearly see just how oversold the stock became on all momentum metrics, including RSI, MACD and Williams’ %R.
There is no question that the legalization both medicinal and recreational marijuana will fuel a boom in this emerging industry, but it's also important to stay abreast of the issues to make informed investing decisions. Get the full marijuana report here.