By Chris Reilly, managing editor, Casey Daily Dispatch
It’s your move, Trump…
After two major developments in the global cannabis industry this month, the U.S. has now reached “a crucial tipping point.”
In short, the president may soon have no choice but to legalize cannabis at the federal level.
That’s the latest from Crisis Investing chief analyst Nick Giambruno, who recently told me all the details at our headquarters in Delray Beach, Florida.
Now, to be clear, Nick’s been saying for years that the U.S. needs to legalize cannabis outright.
But now the pressure’s really on, thanks to our neighbors…
• For one, Mexico’s set to fully legalize recreational cannabis any day now…
If you remember, Mexico’s Supreme Court already ruled that cannabis prohibition was unconstitutional last year. But it said a legalization bill needed to be passed by Mexico’s Congress and signed into law by the end of October 2019.
Earlier this month, the leader of Mexico’s ruling political party, Senator Ricardo Monreal, said the country is aiming to do just that. “We’re thinking that we’ll bring the law out, approve it, at the end of October,” Monreal said. “That’s the schedule we have.”
Nick says this is huge news:
It’s the biggest and most immediate catalyst coming for the cannabis market right now.
That’s because now, Mexico will be by far the largest fully legal cannabis market. It will be the third country in the world to fully legalize cannabis, following Uruguay and Canada. But it’s much bigger than either of those countries. Around 125 million people live in Mexico. That’s roughly 3.5 times more than Canada.
If people in Mexico buy cannabis products at the same rate as people in Canada (on a per capita basis), Mexico will easily become the largest legal cannabis market in the world.
And there was more major news last week…
• On Thursday, Canada officially legalized cannabis derivatives…
Derivatives include non-dried cannabis flower products (think edibles, beverages, and vape pens).
Canada became the second country to legalize recreational marijuana in October 2018. But that just included dried cannabis flower.
This now changes everything. Here’s how Nick broke it down for me:
In jurisdictions where cannabis is totally legal, derivatives – oils, extracts, edibles, vapes, and other products – often add up to about 50% of the overall market.
In other words, the legal cannabis market could soon double in Canada now that derivative products are legal.
Cannabis derivatives will send a huge amount of money flooding into the country’s cannabis market. It’s estimated that Canada’s market for edibles and alternative cannabis products will be worth $2.7 billion annually, including $1.6 billion from edibles alone, and $529 million from beverages, according to a report from financial advisory firm Deloitte.
That’s why Nick says the developments out of Mexico and Canada are both important catalysts for the global cannabis industry.
• And now, the U.S. has more pressure than ever before to follow suit…
The U.S. will soon be sandwiched in between two countries that have legalized cannabis. Legal cannabis markets completely surround the U.S. It’s going to be impossible for the federal government to hang on to prohibition much longer with hundreds of billions of dollars at stake.
There’s enormous political and economic pressure to get in on legalization.
If you look at what Trump has said and done in the past, he’s very open to legalizing cannabis. He already legalized hemp on the federal level last December. Steps towards outright federal legalization are next. And he’ll do it before the 2020 election.
Nick’s absolutely right. Trump has no doubt shown that he’s pro-cannabis.
And Nick says Trump has no downside and a lot of upside to take it to the next level:
Two-thirds of Americans outright support cannabis legalization, and that includes a majority of Republicans. Trump is not going to lose voters by embracing cannabis legalization. But he is going to siphon off some voters from Democrats and independents.
Legalization has no downside and a lot of upside for Trump. I think he’s waiting for the right moment to play this ace up his sleeve to give him the maximum political benefit heading into election season.
It’s only a matter of time before the U.S. joins Mexico and Canada.
And when that happens, the entire industry will go into hyperdrive.
• Right now, it’s the perfect Casey Research speculation…
As you know, pot stocks have seen plenty of volatility this year. Year-to-date, two of the largest marijuana funds have fallen 32% and 24%, respectively. Meanwhile, the S&P 500 has risen 20%.
This has put some investors on edge. But Nick says a second “marijuana mania” is about to get underway – one that will hand savvy investors even bigger gains this time around. And now’s the perfect time to get involved.
The latest moves in Mexico and Canada will kickstart this next boom. Then the U.S. will open the floodgates.
To profit, Nick says you need to be very careful about the cannabis companies you invest in.
You can get some exposure to the industry with an exchange-traded fund like the ETFMG Alternative Harvest ETF (MJ). But like any fund, it’s also filled with some “duds.” This is especially true with an industry as new as legal cannabis.
• That’s where Nick comes in…
Nick’s been covering the opportunity in the space for more than two years now. And readers of his elite Crisis Investing newsletter have already had the chance to book gains of 220%… 248%… and 533%.
If you’re not a subscriber and want to access the best companies before the next phase kicks into high gear, go here to learn more.
And as always, remember that this is a speculation. Never bet more money than you can afford to lose. And take profits as they come.
Managing Editor, Casey Daily Dispatch
P.S. If you don’t think outright legalization is coming to the U.S., you need to watch our brand-new video presentation.
In short, Trump’s found a backdoor way to legalize marijuana at the federal level. One that bypasses Congress… and legalizes weed federally by executive order – with one stroke of his pen.
It’s a bold move. One that will pump $194 billion into an already booming economy… and create 1 million jobs in the near future – giving Trump a smooth path to a second term.