Justin’s note: As regular Dispatch readers know, marijuana legalization is starting to sweep the globe. And it’s providing everyday investors with the opportunity to make life-changing gains.
Recently, Doug Casey and Crisis Investing editor Nick Giambruno sat down to discuss this huge opportunity—and what it means for society as a whole…
Nick Giambruno: Doug, I think cannabis will become a mainstream big business over the next few years. Legitimate companies are already working to commercialize this useful plant in various ways. What’s your take?
Doug Casey: I completely agree. Pot has been proven to have huge medical applications. I think there’s going to be a big recreational market too, at least the size of that for alcohol. And industrial applications for hemp, as a substitute for cotton in fabrics and wood pulp in paper, are gigantic. In fact, these applications will eventually dwarf other uses for hemp.
Nick Giambruno: Have you invested in the space?
Doug Casey: So far I’ve invested in two private cannabis companies that are going to go public.
I bought 500,000 shares of one, a couple of years ago, at a dime per share. I rarely put money in private start-ups—70% of the time they go to zero. In its last round, however, this company privately raised money at $2.25 per share. It looks like they’re going to bring it public at around $4, and if the market’s hot it will go to $10. Potentially a big hit. It has the potential to be a 100-bagger. You need one of those occasionally to compensate for the inevitable losses of putting money in private companies where you’re a minority shareholder.
At that point, I’ll have to figure out whether it’s a real business or just a fortunate speculation. But the big gains in cannabis stocks are still ahead of us. Most of the public companies are still far too small for institutional investors. The big money has yet to participate.
Nick Giambruno: That’s just a taste of the profit potential in this space. Of course, all of these lucrative profits used to be underground.
Doug Casey: I have a number of friends from the ’60s and ’70s who made it big in the pot, coke, and psychedelic trade. The penalties were minimal in those days, the narcs were few and inexperienced, and competition was light. Hippy entrepreneurs of the day tended to get into either drugs or computers.
Nick Giambruno: Recreational marijuana is legal in Colorado, where you live part of the year, Doug. What have you seen?
Doug Casey: I live in Aspen during the northern summer. The little town has at least five pot shops. They’re all coining money. Their big problem is the banks won’t accept their cash deposits, for fear of getting crosswise with the feds.
From what I can tell in Colorado there’s much less abuse than there was in the old days. I also spend a lot of time in Uruguay where it’s legal, and Canada where it’s practically legal. Legalization has—perhaps counterintuitively, and surprisingly to many—radically reduced abuse in those jurisdictions as well. Legalization makes sense in every way, and the trend is going to spread worldwide.
Nick Giambruno: The US government still classifies marijuana as a Schedule I drug. In other words, the feds consider marijuana as dangerous as cocaine or meth.
And I’m sure you remember when Jeff Sessions, Trump’s attorney general, infamously called marijuana “slightly less awful” than heroin. Comments like this have kept a lot of people from investing in marijuana.
What’s your take?
Doug Casey: Well, let me preface this by saying Sessions was a disastrous choice for Attorney General. He’s done nothing in his life but act as a prosecutor, and a politician. He has no experience—and therefore probably no inclination or even ability—to produce things of tangible value.
But we almost always get undesirables as the AG. They’re hatchet men, meant to prosecute “the enemy,” taking their pick of the hundreds of thousands of laws and regulations on the books to do so. Look at some of the recent AGs—Loretta Lynch, Eric Holder, Alberto Gonzales, John Ashcroft, Janet Reno. All of them would have been willing and obedient lapdogs to Stalin or Beria. A certain personality type is suited for the job.
Sessions is a rabid drug warrior, even against something as useful and benign as hemp, or marijuana. He’s a busybody who feels no guilt or remorse at enforcing laws that have destroyed the lives of tens of millions. I don't know if he's stupid, bent, thoughtless, paranoid or what his problem might be. Maybe he’s afraid that if pot wasn’t illegal he’d become a dope fiend himself. But the proper direction, the objective, is to legalize all drugs. Not amp the drug war up another notch, as he wants to do.
Nick Giambruno: Fortunately, we can make money in the industry no matter what the US government does.
Doug Casey: There are dozens of marijuana companies out there already. A bunch more will come public. The marijuana market is going to get hot—notwithstanding my bearishness on the economy and stocks in general.
Nick Giambruno: Thanks for sharing your insights, Doug. I agree.
In fact, you and I discussed this at a free investment summit last Wednesday. Thousands of readers tuned in to learn how to profit from the marijuana boom, including the best stocks to buy.
Readers who missed it can still learn more about this up-and-coming industry right here—and see how to access the names of our top five marijuana picks today.
Justin’s note: As Doug and Nick explained, you still have time to get in on the ground floor of the biggest marijuana boom of our lifetime. They’ve pinpointed the top five tiny pot stocks set to soar in 2018. You can learn more by watching this new video presentation.
I do admire your perspective on buzzwords, especially your thoughts on taxation. Couldn’t agree more. I, for one, have said for years that when asked if I own my own home, my answer is always that I hold the title, but lease from the government. When asked why I say that, I say that if you don't pay your property taxes, see how long you have the title. To be like you, I pay my taxes as owed. Don't need any problems this late in life.
Without expanding on the term, I absolutely agree with Doug’s concept of buzzwords. I’m a regular reader of Doug’s opinions, and have read both of his recent books. His opinions have merit, and I agree with his thoughts of rational thinking.
Casey explains these “terms” commonsensically, precisely the way I have always concluded is accurate. The problem is to find one word that communicates clearly what you mean by “scumbag a**holes trying to ruin your life the way you would most like to enjoy it.”
Casey is always worth a read… One doesn't have to fully agree with everything he says to find value in his insights and appreciate his well thought out philosophy. Maybe I appreciate his input because he is right and on-track most of the time… however unpopular his perspective might be in a world of emotion over intellect.
Let us know what you thought about the interview right here.