Opioids, China and Marijuana
What do Opioids, China and Marijuana have in common?
Yes, both drugs originated in Asia, but for my purposes, what’s more important is the way that opportunities for profit—from investing in opioids, China and marijuana—have been inextricably tied to government policies.
Opioids, for starters, have made millionaires of many people in this country, while killing countless thousands of users who became addicted in numbers lawmakers never imagined when they approved those drugs. The makers of those drugs have been pilloried for putting profits over people, and I agree that what’s happened is terrible, but if we’re going to punish those that enabled this travesty, I’d also round up the FDA, which approved the drugs, the insurance companies that reimbursed for them, and the doctors that prescribed them. Opioid painkillers were originally intended for the treatment of severe pain of cancer and end-of-life care, but in the late 1990s, they began to be prescribed for a wide variety of less serious conditions. And they still are, even though we know better. Less than two years ago, my wife had her appendix out, and was prescribed a dozen common opioid pills. She took none of them; she didn’t need them!
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Government policies, mainly in the U.S., enabled the crisis and still have not corrected it.
Meanwhile, 16 years ago, Cabot launched an investment advisory service focused exclusively on Chinese stocks, and it did splendidly for its first decade, as Chinese enterprise boomed, spurred by loose money, government policies that rewarded entrepreneurship, and a heavy hand that punished companies that strayed from the Chinese government’s aims. But in recent years, the engine of growth has slowed and now I fear/hope that China is headed for deep trouble, as the government runs out of carrots and sticks and the global free market grows increasingly competitive with the Chinese market.
Government policies, in both China and the U.S., enabled the boom in Chinese stocks, but now the tide is turning.
In fact, in recent years, we’ve shifted that advisory’s focus away from China; it’s now named Cabot Global Stocks Explorer—free to recommend the best stocks in the world.
Marijuana Stocks are the New Chinese Stocks
Meanwhile, our newest and hottest advisory is Cabot Marijuana Investor, which is focused on the fastest-growing industry in the U.S., which in addition to marijuana includes CBD and hemp.
The results of this marijuana investing advisory to date have been spectacular.
Aug 2017 to Dec 31, 2017: up 120.9%
Dec 31, 2017 to Dec 31, 2018: up 15.1%
Dec 31, 2018 to present: up 30.0%
And I believe there are years of profits ahead, as the industry booms, both from current marijuana users switching from the black market to the legal market and from new users discovering that a mild daily dose of marijuana or CBD is an effective natural treatment for what ails them. (Baby Boomers are going to be a huge market.)
Furthermore, just as the U.S. government enabled the widespread use of opioids, which was bad, the U.S. government is going to enable the widespread use of cannabis products, which, though not totally good, certainly have far fewer negative attributes than opioids.
For example:
The Farm Bill, passed last December, has made hemp legal nationwide, and thus given a boost to the CBD market—and allowed, for the first time, true scientific research into exactly what CBD does.
The Secure And Fair Enforcement (SAFE) Banking Act, which would protect banks that service state-legal cannabis businesses from being penalized by federal regulators, is making its way through both the Senate and House, and apparently picking up steam. It’s backed by 50 state banking associations, the National Association of State Treasurers, the top financial regulators of 25 states, a majority of state attorneys general and bipartisan governors of 20 states.
The Strengthening the Tenth Amendment Through Entrusting States (STATES) Act, which would amend the Controlled Substances Act and exempt state-approved marijuana activity from federal enforcement, is also making progress, though it still faces substantial opposition in the Senate.
In short, the trend is clear. Government forces in the U.S. are becoming increasingly supportive of the cannabis industry - and, by extension, marijuana investing.
Marijuana Investing: The Tide is Turning
But even without federal legalization (yet), this industry is thriving!
In Cabot Marijuana Investor, for example, I have a portfolio of 16 companies, some of which are marijuana companies (both Canadian and U.S.-based), some of which are CBD companies, and some of which don’t touch the plants at all, like the company focused on packaging or the Real Estate Investment Trust (REIT) focused on leasing commercial properties to companies in the cannabis industry.
And business is booming at these companies, with the average growth in the latest quarter, compared to the year before, a jaw-dropping 347%.
Admittedly, these are still small companies. And the fact that we don’t have federally legal banking for marijuana companies means that some of the more risk-averse investment institutions still won’t invest in the sector. But the tide is turning fast. Early investors are making money hand over fist. And if you wait until all the risk is gone, you’re going to miss the best marijuana investing opportunities.
Just last week I added two new marijuana stocks to my portfolio. One is a major grower/seller of CBD in the U.S., which saw its revenues grow 66% in the latest quarter, while the other is an established Canadian company, mainly in the retail alcohol business, which is expanding rapidly into the retail cannabis industry. You can’t yet buy a six-pack and a pre-roll (the modern name for a joint) at your local store, but if it ever comes to pass in Canada, this company will be there!
Both these companies are under the radar of most marijuana investors and thus ripe for growth. To learn their names, click here.
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