Cannabis stocks entered a bear market in the fall of 2018.
It raged until roughly this time last year.
But since then, one of the big indexes that tracks cannabis stocks is up about 100%.
And according to one of our top experts on the industry, it’s the start of a new boom.
What’s driving this new boom in legal cannabis stocks? Why is this one of the biggest profit opportunities for your radar right now?
Find out all about it in your Weekly Pulse video above, with me, Chris Lowe, and Weekly Pulse host Tom Beal.
Editor, The Daily Cut and Legacy Inner Circle
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Tom Beal: Chris, what wealth-growth story are we going to dive into today?
Chris Lowe: Tom, today, we’re going to talk about the second boom in legal cannabis stocks. Teeka Tiwari and his team at Palm Beach Research Group have been putting this on their readers’ radars.
Canopy Growth Corporation (CGC) is the largest cannabis grower in the world. It’s based in Canada, but you can buy its shares in New York (on the Nasdaq).
From the beginning of 2016 – so around the time when Donald Trump got elected – until April 2019, Canopy went up from about $2 a share to about $43 a share, which is about a 2,000% increase.
Then it came tumbling down again to about $14 a share, which is roughly a 70% drop. It’s a big, bone-crunching drop.
But the really big takeaway from that is that since October last year, really since Election Day, Canopy has been screeching higher. It’s up almost 100% since then.
That’s the second boom I’m talking about.
Teeka’s analysts say there are two reasons for this. The first is ongoing legislation, both at the state level and at the federal level.
And the second thing is booming cannabis sales.
Tom: Wow! And that brought me a flashback. I was totally unaware of legal cannabis until tapping into the wisdom you and the Legacy Research experts bring to my attention.
But I invested in one legal cannabis stock after doing some research. It also had that high rise and big fall. Fortunately, I put a stop-loss mechanism in place to not ride it all the way up or down.
But that chart is what flashed me back to that memory. So basically, there’s a lot of volatility, from what I hear. Is that looking to thin out and not be so volatile? What are the folks at Legacy projecting?
Chris: Tom, I think you’ve hit the nail on the head when you mention volatility. These things are highly volatile. 2,000% on the way up and 70% on the way down.
It’s the same thing we’ve been talking about with cryptocurrencies. Volatility is the price you pay as an investor to earn those kinds of staggeringly large returns, like that 2,000% return folks earned in the very beginning phase of the boom. You just don’t get that without volatility.
So will there be volatile times ahead for cannabis stocks? Yes, there will be. But that volatility will also include a lot of upside volatility, which means a lot of profits.
Just look at what’s happened recently on the legalization side. New York, Virginia, and New Mexico legalized cannabis for recreational use on Election Day last year.
There was a lot of big news happening, as you know, on and around Election Day. It actually drowned out something that was really important, which is what we called a “green wave” for the cannabis legalization trend. It was a green wave election. Five states legalized six cannabis initiatives. South Dakota legalized medical and recreational cannabis use on the same day. So that’s why it was six ballots in five states.
And this month, Tom, the SAFE Banking Act passed through the House. It’s kind of crazy. Even though the cannabis industry is legal in the states that the dispensaries and companies operate in, they’ve been largely forced to use cash to do all their business.
I talked to this guy, Jeff Siegel, who is a pioneering cannabis investor. We talked to him for Legacy Inner Circle. He runs a newsletter called Green Chip Stocks. And he told me it’s like gangster movies. You go into the dispensaries, and they’ve got this big safe in the back. There’s lots of cash.
They hire Brinks armored trucks. They bring them to secure facilities, where they just basically pile up loads of cash.
So the SAFE Banking Act, if it goes through the House, will change that in a very good way.
And also, we’ve seen a lot of talk from Senate Majority Leader, Chuck Schumer, the Democrat from New York. He’s now the most powerful Senator in the country.
And he is saying that he wants comprehensive federal cannabis legalization. He is saying, “Forget about this patchwork thing of doing it state by state. We really should have federal legalization. Look, we’ve had this experiment in the states. We’ve seen what happens when you make cannabis legal. And the parade of horrors that the War on Drugs warriors in Washington talk about just hasn’t materialized.”
So I think that is very, very bullish. And it’s why I’m really interested in this sector, along with the guys over in Teeka’s group.
Tom: Thanks for bringing that to our attention, Chris. As I mentioned, you brought it to my attention a while back. I looked into it, made a few moves, and reaped some great rewards. So whether or not anyone watching this has looked into the legal cannabis wave, the Green Wave, as Chris and others have mentioned, now might be the time to take a peek and see how that might be part of the wealth-growth strategies to help you grow your portfolio and wealth.
So thanks for bringing that to our attention, Chris. Anything else to add to today’s discussion?
Chris: I would just add that cannabis sales have been booming. This time last year, I wrote about how during the lockdowns, during the worst of the pandemic last March and April, states were designating cannabis dispensaries, both medical and recreational dispensaries, as essential businesses, just like grocery stores.
This translated into a huge boom in sales. Colorado just reported $2 billion in cannabis sales in 2020. And that was amid the COVID-19 lockdowns and a 50% drop in tourism to Colorado.
And last month, Illinois set a record of over $100 million in sales. It’s only in its second year of legalization, and it’s now actually up there with Washington State and Oregon State, that have had legalization for much longer.
The final takeaway is that there was a scarring bear market. If you were involved in this burgeoning space, it was bad, a 70% drop. That leaves scars.
But I hope people will focus on what’s happening at the legislative level. And also, those sales that are really booming and growing.
One thing you can do is look at Canopy Growth (CGC). It’s like the Coca-Cola, if you like, of that industry. It’s an easy way to bet on an expanding sector over time.
Tom: Eye-opening as always, Chris. I look forward to our chat next week. Thanks for bringing the legal cannabis wave to our attention this week.
Chris: Thanks, Tom.
Tom: If you’re still watching, that means you’re not yet a member of Legacy Inner Circle. Chris, you have been sharing insights like you just shared here with Legacy Inner Circle on a regular basis. That is not just in legal cannabis, but the whole gamut of the experts within Legacy Research Group.
Which is why now is the time to take a closer look at Legacy Inner Circle, join us in the members area, and reap the benefits that are waiting for you inside there.
Chris: Tom, over the last 12 months, back to the beginning of 2020, we had the pandemic, we had that huge crash, the fastest bear market in history in last February and March, a 36% drop on the S&P 500. One of the biggest drops a lot of people will have gone through in recent memory. And then we saw this huge boom.
We’ve been on those stories every step of the way. We have Teeka Tiwari, who, in addition to being a crypto investment expert, is also an ex-hedge-fund manager. This guy knows about market cycles. And last March, he told our readers, “Hold on, don’t sell your stocks.”
That’s absolutely priceless information to have, especially when negative headlines are building up in the mainstream press.
We first wrote about legal cannabis in Legacy Inner Circle in May 2017. We were there at the very beginning of that first boom, when Canopy went up 2,000%. We even recommended a U.S. cannabis REIT. That’s a real estate investment trust. It’s a company called Innovative Industrial Properties (IIPR). It rents cannabis-growing facilities in the U.S. That went up more than 1,000% percent since our recommendation.
So if you’re interested in finding market megatrends ahead of the crowd, so you can make those early-stage profits and really move the needle on your wealth, I really can’t think of a better way to do it than by tapping into all of the ideas in Legacy, and not just limiting yourself to one or two subscriptions, that typically follow one or several narrower sectors in the market.
Tom: I agree. And we have a very special offer for you. Below this video, there’s a link. Click the link, go learn more about what’s inside Legacy Inner Circle, and then take a look at the special offer we have. We know you’re going to be thrilled with it.
We look forward to seeing you inside the members area – and the app on the iOS and Android device – so that you can tap the insights Chris curates from all the experts within Legacy Research Group for your benefit, to grow and protect your wealth in the upcoming weeks, months, years, and decades.
So check it out. We look forward to seeing you inside the members area.
Thanks again, Chris, for bringing us all these great insights.
Chris: Thanks, Tom.
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