You probably heard some apoplectic people shrieking on your TV this week. They got excited because Canadian marijuana grower Tilray (Nasdaq: TLRY) went on a wild roller coaster ride, capping off a month in which it gained 540 percent!
At one point, Tilray was bigger than Twitter (Nasdaq: TWTR), CBS Corp (NYSE: CBS), Hershey (NYSE: HSY) and a host of other big names. Then it fell back again. So, every Tom, Dick and Cramer on Wall Street rushed to declare doom for the sector.
Cannabis was inflated like a zeppelin, they declared. Why, cannabis is the new crypto! A bloated bubble that would burst in investors’ faces!
Y’know, I hope those critics can learn to live with disappointment. But let ’em talk down the stocks first. Because I want to buy more!
Sure, Tilray got ahead of itself. Some other cannabis stocks did, too.
But these critics are guilty. They’re guilty of thinking too small.
Maybe they’re thinking of the potential in the just Canadian market — where pot sales could jump by more than 500 times when that country legalizes recreational marijuana on Oct. 17.
Or maybe those critics stretched their wee brains to consider the potential of the North American market. And that outlook is good. Legal cannabis sales reached $9.2 billion in the United States last year. That market is expected to explode to $47.3 billion by 2027. That’s according to Arcview Market Research and BDS Analytics
But if that’s where critics are stopping, they’re still thinking too small.
Because cannabis is going to a global market. And that market could be worth more than $200 BILLION by 2032.
We don’t know what the true size of the market will be that far out. But one thing all analysts have in common when it comes to cannabis is their predictions are all too conservative.
So … $200 billion! That’s not small change. That’s real money for a real product that real people are going to use every month, some every week, some every day.
In other words, it’s not Bitcoin, either.
And that $200 billion potential is why investors large and small are throwing money at the weed business.
Heck, even Coca-Cola is getting into legal weed. The beverage maker is in discussions with Aurora Cannabis (OTCQX: ACBFF) to develop beverages infused with CBD. That’s a substance found in marijuana that won’t make you high. Many health nuts swear by it for all sorts of reasons.
Coke has good reason to make the move. Soda consumption per capita is falling. It hit a 31-year low recently, with $76.4 billion in sales in 2017.
Meanwhile, cannabis sales in the U.S. alone could hit $75 billion by 2030.
That trend is ugly for soda and great for weed — and Coca-Cola wants to be on the right side of it.
Because you know what? The market for sodas that DO get you high is going to be huge.
I recently spoke at a MoneyShow in San Francisco. Since California legalized weed on a state level, cannabis investments — and products — are all the rage.
At the show, one person I really wanted to talk to about this was Gene Simmons. You know, the bass player from the rock group Kiss. He’s now the Chief Evangelist Officer for a Canadian cannabis company, Invictus (OTCQX: IVITF).
So, he’s gone from looking on the left to what he looks like on the right.
I don’t know. I think Mr. Simmons looked happier when he was on stage in crazy clown makeup, slammin’ the chords to “Rock and Roll All Night.” Now he looks like he sucks lemons for a living.
Anyway, Mr. Simmons is supposed to be a very smart businessman. So he would have been great to talk to. But I wasn’t at the conference at the right time.
However, I did the next best thing. I walked down the street to the nearest cannabis dispensary.
See, since California legalized pot on a state level, these shops are everywhere. Here are the ones around my hotel …
Grass Roots Dispensary … ReLeaf Herbal Cooperative … Flowers to the People Cannabis Retail Store … I tell ya, some of this word play is very clever.
I decided to go to the Barbary Coast Dispensary. It has a good rep.
And it was packed! There were lines wrapped around inside the place all the way to the door.
Now, I’m not enough of a jerk to snap photos of random people in a shop that sells substances illegal on a federal level. I don’t want to get anyone in trouble with the feds or at work. But I could take photos of some products.
You’re looking at a peanut-butter-flavored cookie and grapefruit-flavored soda, both of which contain 10 milligrams of THC. That’s tetrahydrocannabinol, the substance in pot that makes you high.
My “budtender,” as he’s called, said these were two popular sellers. He said he prefers dried marijuana bud himself. But the market for “edibles,” as they’re called, is soaring.
And why not? After all, that drink may cost $10 a bottle. But you don’t have to worry about a hangover, do you?
Sure, it’s not exactly a diet drink. Each bottle contains 25 grams of sugar. Still, it’s nutritionally better than Coca-Cola. Your Coke contains 39 grams of sugar.
Add it all up, and you can see why makers of beverages might be interested in expanding into the cannabis market.
It’s not just Coca-Cola, of course. Constellation Brands (NYSE: STZ) — maker of Corona beer, among others — has invested a big chunk of money in Canopy Growth (NYSE: CGC), a big Canadian cannabis company. Molson Coors (NYSE: TAP) is partnering with Hexo Corp. (OTCQX: HYYDF).
Full disclosure: Subscribers to my Supercycle Investor own some of these stocks, and I own others in my personal portfolio.
And we are kicking this market’s butt.
I’d like to own more. So, bring on the naysayers, the doubters, those eager to see cannabis stocks fall hard. Because this is a big bull market, my friends. I do a lot of work with trends, and this trend is just getting started. That means pullbacks can be bought. Pot stocks will zig and zag. They’ll be too volatile for some people. But not for me. And maybe not for you.
Do your own due diligence before you buy anything.
All the best,
P.S. In early November, I’ll be speaking at the New Orleans 2018 Investment Conference. It will be a great show, with all sorts of experts sharing their insights. And I’ll give my best picks. You can find more about that incredible conference HERE. I hope to see you there!
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