By Chris Reilly, managing editor, Casey Daily Dispatch
Marijuana stocks have taken a beating this year.
The MJ PurePlay 100 Index – which tracks the performance of 100 top global cannabis companies – has plummeted 62% since March. Some individual stocks have fallen more than 90%.
If you’re invested in the sector, and starting to think about hitting the panic button, I understand.
It’s hard to stay optimistic while prices plummet.
But if you back out now and start selling all of your positions…
You’ll be making a huge mistake.
Let me explain why…
• Legal cannabis isn’t your average trend…
It’s one of the fastest-growing industries on the planet. And it’s here to stay.
Just look at what’s happening in the U.S. alone…
According to BDS Analytics, the U.S. marijuana market is already a $13.1 billion industry. And it’s expected to grow to $22.2 billion by 2022. That would be a 69% increase in just three years.
And legalization is only gaining momentum.
Already, 33 U.S. states (plus Washington D.C.) have legalized medical marijuana. And 11 (plus D.C.) have completely legalized it for recreational use.
That’s why it makes sense to have a long-term perspective… and not lose sight of the big picture.
• And today, the big picture is stronger than ever…
For instance, last Wednesday, history was made when the House of Representatives’ Judiciary Committee approved the landmark Marijuana Opportunity Reinvestment and Expungement (MORE) Act.
This is the first time that a key congressional committee approved a bill to end federal marijuana prohibition.
And while it still has to pass the Senate and President Trump, we’re now closer than we’ve ever been to outright cannabis legalization in the U.S. (And if it does make it to Trump, we think he’ll make it happen. It’s a no-brainer. Go here to see why.)
And that’s not the only bullish development.
• A lot is happening right now…
That’s why today, I brought in my go-to guy for the legal cannabis industry: Crisis Investing chief analyst Nick Giambruno.
Nick first highlighted what was then the coming legal cannabis boom in June 2017… long before the mainstream media got on the case.
And despite the sell-off over the past six months, two of Nick’s picks are still up by triple digits. His top recommendations are up 394% and 166% since he added them to the Crisis Investing model portfolio in mid-2017.
And as you’ll see, his portfolio stands to do even better in the months ahead.
Well, below, Nick tells me where we are today. There’s another initiative, apart from the MORE Act, that Nick says will have major implications for the entire market.
In fact, Nick says that in about a year, “It’s entirely possible there will be over 40 U.S. states that have legalized cannabis in some form.”
• In short, now’s the ideal time to get involved if you haven’t already…
The legal cannabis boom is one of the best long-term speculations today. And it’s still in the early innings.
To me, this looks like the perfect opportunity to use this sell-off as a time to buy.
Managing Editor, Casey Daily Dispatch
P.S. Not yet convinced? Read on for my interview with Nick Giambruno below…
Why Outright Cannabis Legalization Is Moving Closer to Reality
Chris Reilly, managing editor, Casey Daily Dispatch: Hi, Nick. Let’s get right to it…
So the House Judiciary Committee just approved a bill to end federal marijuana prohibition for the first time in history. How big of a deal is this… and what does it mean going forward?
Nick Giambruno, chief analyst, Crisis Investing: Well, to set the stage, you have to understand the bigger picture of the status of cannabis around the country. First, over 80 years of prohibition has caused huge distortions in the market that will take years to work out.
And it will be years before the various markets mature to their full potential.
With this in mind, I believe the legal cannabis story is closer to its beginning than its end, because this megatrend is not only still intact, but getting stronger.
Since I put cannabis on my Crisis Investing subscribers’ radar in June 2017… more than two and a half years ago… a lot has happened. We’ve had several huge winners in the cannabis space, the industry has made huge strides, and the tune around marijuana has changed drastically.
That brings us back to the bill you mentioned…
The majority of Americans on both sides of the aisle think marijuana should be legal, and so far, 33 U.S. states have legalized medical marijuana. That’s more than half of the states. And 11 have completely legalized it for recreational use.
And legalization only continues to pick up speed.
Chris: Any examples?
Nick Giambruno: Let me run down a quick list of legislation state governments have passed just this year aimed at legalizing cannabis:
Delaware, which is allowing expungement of one felony or misdemeanor related to cannabis;
Georgia, allowing the growing and selling of medical cannabis;
Hawaii, decriminalizing cannabis;
Illinois, legalizing cannabis for both medical and recreational purposes;
New Mexico, decriminalizing cannabis;
North Dakota, partially decriminalizing cannabis;
Texas, expanding its medical cannabis program and legalizing hemp.
Last month, legislators introduced a bill to legalize recreational cannabis in Pennsylvania. If it passes, Pennsylvania will become the 12th state in the country to allow recreational use of marijuana.
Nine more states may legalize cannabis in some form in 2020, including the crucial states of Florida, New Jersey, and New York.
It’s entirely possible, in about a year, there will be over 40 U.S. states that have legalized cannabis in some form.
Chris: What’s happening today at the federal level?
Nick Giambruno: Well, with everything that’s going on within the states, it shows that there’s huge momentum… and this momentum is pushing the federal government to finally change its tune related to cannabis.
At the federal level, lawmakers have introduced several cannabis initiatives so far in 2019…
As you mentioned above, last week, the House moved towards approving a bill that would legalize marijuana at the federal level. It’s called the Marijuana Opportunity Reinvestment and Expungement (MORE) Act. This law would decriminalize marijuana at the federal level, expunge prior cannabis-related convictions, remove it from the list of Schedule I substances, and authorize a sales tax on marijuana to fund grant programs.
The sector rallied on the news. As I’ve said before, this megatrend is intact and getting stronger.
This bill is an excellent step for the industry… but there’s still a long way to go.
But there’s another important initiative…
I’m talking about the SAFE Banking Act.
This was passed in September by the House of Representatives, and it’s actually the first time the U.S. Congress has passed an explicitly pro-cannabis piece of legislation. The Safe Banking Act will allow cannabis companies in states that have legalized cannabis to access the banking system. This is a huge win for cannabis companies… They’ve been largely cut off from access to banks because of the gray area of cannabis’ legal status.
Chris: Can you explain?
Nick Giambruno: As you know, banks are federally regulated. So there’s kind of a conflict here. While many states have legalized cannabis, it’s still illegal on the federal level. So a bank – which is regulated on a federal basis – doesn’t want to touch something that is illegal on the federal level, even though it might be legal on the state level.
That forces all cannabis companies in these states that have legalized cannabis to be cash-only businesses. So what this piece of legislation does, the Safe Banking Act, is it allows for cannabis companies in states that have legalized it to access the banking system.
This is a huge step towards overall legalization, and now that it’s passed the House of Representatives, it’s going to the Senate, and if it passes the Senate, it’s going to go to President Trump’s desk. And Trump has previously indicated that he’ll support it.
So this is something that could happen in the next couple of weeks, or next couple of months. Nobody really knows when it could happen, but it’s got momentum. This could be a major, major step towards federal legalization of cannabis. All Dispatch readers should keep their eye on it.
Chris: Thanks, Nick. It definitely seems like things are looking up for the legal cannabis industry. Appreciate the time.
Nick Giambruno: My pleasure.
Chris’ note: If you still don’t think Trump can pull this off, I urge you to watch our brand-new video presentation.
In short, Trump has outfoxed Congress.
He’s found a backdoor way to legalize marijuana at the federal level. A backdoor way 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.
You’ll want to make sure you’re positioned now… before cannabis stocks explode higher.