By Justin Spittler, editor, Casey Daily Dispatch
There’s a new way to invest in marijuana…
Just six weeks from now, Tierra Funds will introduce the first U.S. marijuana exchange-traded fund (ETF).
Tierra will call its new fund the Alternative Agroscience ETF. It will invest in marijuana cultivators, medical marijuana drugmakers, and companies that serve the industry.
It will allow investors to bet on the entire marijuana industry instead of individual stocks. In theory, this should reduce the risk that comes with betting on such an up-and-coming industry.
But I wouldn’t go near this fund. In fact, I’d avoid it at all costs.
I’ll explain why in today’s essay. I’ll also show you an even better way to profit off legal marijuana.
But let me first tell you why Tierra is launching this fund.
• Marijuana legalization is sweeping the country…
In November, five U.S. states voted to legalize marijuana outright. Twenty-nine states along with Washington, D.C. now let you use marijuana for either medical or recreational purposes.
Legal marijuana is now the fastest-growing industry in the United States.
Last year, it grew 30%. That’s nine times faster than the entire U.S. economy grew in 2016. And this boom has only just begun.
By 2026, investment bank Cowen and Company projects that the industry will be worth $50 billion. That’s eight times bigger than it is today.
• We haven’t seen an industry explode like this since the internet in the late 1990s…
And yet, many investors still want nothing to do with marijuana stocks.
They’re worried the federal government will crack down on the industry. And that’s because Trump’s attorney general Jeff Sessions is a drug warrior.
But that’s an irrational fear.
You see, the marijuana industry already generates billions in sales every year. It’s created more than a hundred thousand jobs. And it’s keeping states like Colorado from going bankrupt.
In short, the marijuana industry is simply too big to shut down.
• It’s only a matter of time before the average investor realizes this…
When that happens, money will pour into marijuana stocks like we’ve never seen before.
Tierra Funds knows this. That’s why they’re launching the first marijuana ETF in the U.S. They want to get in front of this coming stampede.
So, why should you avoid Tierra’s marijuana fund? Well, there are actually a few reasons.
For one, Tierra isn’t creating this fund from scratch. Instead, it’s going to retrofit its Tierra XP Latin America Real Estate ETF (LARE) into a marijuana fund.
That fund has just $6 million in assets. It’s tiny, and extremely illiquid.
• More importantly, you shouldn’t take a “shotgun approach” to investing in pot…
That’s because most U.S. marijuana companies are garbage.
They’re bleeding cash. They’re drowning in debt. And they’re trading at sky-high premiums. Some are even outright scams.
Many of these companies will likely find their way into Tierra’s marijuana fund. And the last thing you want to do is own a basket of crummy marijuana companies.
• If you really want to make money in pot, you need to handpick the best stocks…
Unfortunately, most investors don’t know the first thing about investing in marijuana.
That’s where I can help. You see, I’ve spent the last six months researching the marijuana industry around the clock.
But I haven’t just sat at my desk like other so-called experts. I’ve gone to the front lines of the global marijuana boom.
This “boots on the ground” research has helped me understand how the marijuana industry really works. I’ve also discovered something that most analysts don’t realize.
• The best way to make money off marijuana isn’t with traditional marijuana companies…
It’s with “picks and shovels” companies.
These are companies that serve marijuana growers and distributors. They don’t “touch the plant.”
This gives them a huge advantage over traditional marijuana companies.
You see, marijuana is still a Schedule I drug at the federal level. Because of this, traditional marijuana companies have trouble accessing capital. They must run cash businesses. And they can’t move their product across state lines.
• “Picks and shovels” companies don’t have these problems…
They can stick their cash in a bank. They can accept credit cards. They can also borrow money from traditional lenders if they want.
In other words, they don’t have nearly as many legal and regulatory headaches as traditional marijuana companies.
Not only that, “picks and shovels” companies can ship products across state lines. This makes it much easier for them to grow.
• So, consider speculating on marijuana companies like these if you haven’t already…
You can begin your research by visiting The Marijuana Index. This website lists hundreds of U.S. marijuana companies.
That’s obviously more companies than anyone has time to vet. But you can narrow this list down by category. I suggest looking at companies in the “Direct Support” and “Ancillary” sectors under the “Sectors” tab.
Just understand that there aren’t any “sure things” in the marijuana industry. So, be sure to do your homework before buying any marijuana stock.
You should also treat marijuana stocks as a speculation.
Don’t bet more money than you can afford to lose. Use stop losses. And take profits when you get them.
Investors who do these things will set themselves up for big gains without risking huge losses.
November 16, 2017
P.S. In my research, I’ve looked at more crummy marijuana companies than I can count. But I’ve also discovered some diamonds in the rough… including three world-class marijuana “picks and shovels” companies.
All three of these stocks trade on U.S. exchanges. And each has the potential to return 1,000% or more in the coming years.
Unfortunately, that’s all I can share for now. But keep an eye out for the December 1 Dispatch—I’ll have much more to say then.
Are you investing in marijuana companies? If so, let us know how it’s going right here.
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