By Justin Spittler, editor, Casey Daily Dispatch
“Someday—not far in the future—you’ll see a takeover mania in the area.”
Doug Casey said this in October.
He was talking about the cannabis industry. Here’s what Doug told readers of The Casey Report, our flagship advisory:
My guess is that as cannabis becomes fully legal in all its forms in the years to come, big food and drug companies will take over the leading players—at a big premium.
It was a bold call.
At the time, there hadn’t been many “blockbusters” in the marijuana space…just a few small deals.
But Doug absolutely nailed this call.
• Two weeks later, Constellation Brands announced plans to buy 10% of Canopy Growth…
Canopy is the world’s largest cannabis company. It serves more than 55,000 medical marijuana patients in Canada.
Constellation, on the other hand, is the third-largest U.S. beer company.
The deal is worth $191 million. Constellation also has the option to double its stake in Canopy in the future.
Canopy’s share price jumped 19% on the day of the announcement.
But that’s certainly not the only time investors have enjoyed monster gains thanks to a marijuana deal…
• A few weeks later, an even bigger cannabis deal was announced…
This time, Aurora Cannabis offered to buy CanniMed for $425 million.
Aurora is the world’s second-largest marijuana company, while CanniMed is a mid-sized producer.
It would create a company worth $3 billion. That would make Aurora the largest cannabis company on the planet.
• CanniMed’s stock soared 29% on the news…
But the deal hasn’t even closed yet. And it may never.
That’s because this was an unsolicited offer. CanniMed doesn’t want to be acquired.
So, it’s now doing everything it can to prevent this deal from happening.
It took a “poison pill”—a tactic companies use to make them unattractive to the bidder. It asked regulators to intervene. And yesterday, the takeover battle went before the Saskatchewan and Ontario securities commissions.
Soon, all this drama will come to an end. But I didn’t write this essay to speculate on whether this deal will close or not.
I wrote it because these recent blockbuster deals tell us that a cannabis takeover mania is underway.
That’s not something speculators can ignore. After all, getting in front of a big merger is one of the only ways investors can make 20%…30%…or 40% on a stock in a single day.
So today, I’ll show you how to make the most of this mania.
But let me first tell you why all these deals are happening in the first place.
• Marijuana is one of the fastest-growing industries on the planet…
Last year, the North American market grew 30%.
According to The Arcview Group, that’s faster than the cable television industry grew (19%) in the 1990s. It’s also faster than the broadband internet industry grew (29%) in the 2000s.
Arcview is one of the world’s leading marijuana research companies. It knows the market better than just about anyone on the planet.
Earlier this year, Arcview projected that the market would grow another 25% this year.
But even it understated the market’s potential…
• So, Arcview just updated its marijuana growth forecast…
It now expects North America to do $10 billion in cannabis sales this year. That’s 33% more than the industry did last year.
Troy Dayton, the CEO of Arcview, says there’s only one other industry that even comes close to cannabis:
Aside from cryptocurrency, there is simply no other industry changing as rapidly or as unevenly as the cannabis sector.
In other words, massive profits are on the line. That’s why we’ve seen so much dealmaking lately.
But you must understand something.
• The marijuana industry is still very young…
It’s also highly fragmented. In fact, there are only maybe two or three “blue chip” marijuana stocks today.
Because of this, we’re going to see a lot more dealmaking in the coming months.
This is bullish for the entire marijuana industry.
Just look at what happened after the Constellation-Canopy deal was announced. The Canadian Marijuana Index has more than doubled in value.
• This happened because big deals grab headlines…
They bring a lot of attention to the industry.
And that gets investors off the sidelines. It attracts new buyers.
Long story short: the takeover mania that Doug predicted has begun. And it will send marijuana stocks much higher in the months ahead.
So, consider investing in marijuana stocks if you haven’t already.
Just make sure to do your homework first. And don’t forget to treat marijuana stocks like a speculation. You don’t need to bet a lot of money to make a fortune in the years ahead.
New Orleans, LA
December 21, 2017
P.S. Doug and E.B. Tucker, editor of The Casey Report, have been following the marijuana industry closely over the last few months.
They just put the finishing touches on a brand-new video presentation that explains everything you need to know about this massive opportunity.
To watch it now—and learn how you can access their top 3 picks to profit from today—click here.
Chart of the Day: Commodities Are Cheap and Ready to Rip Higher
By Joe Withrow, analyst, Casey Research
That’s what Doug Casey had to say regarding the next massive shift in the commodities cycle.
Doug called the bottom in South African gold stocks back in the ‘70s and uranium’s bottom in the ‘90s. He advised readers to get into silver before it spiked 800% in the early 2000s.
So, when Doug says a new commodities boom is coming, we listen.
As you can see in today’s chart, commodities have been beaten down since 2011. As a group, they’re now trading at their lowest levels since 1995.
The Thomson Reuters/CoreCommodity CRB Index tracks 19 different commodities across five different exchanges—from agriculture, to industrial metals, to precious metals, to energy. This makes it the broadest gauge of the overall commodities market.
This chart of the CRB Index demonstrates the extreme nature of commodity cycles. Notice how commodities tend to fall for years… then explode higher… only to fall again.
And as you can see, the CRB bottomed at its lowest level in 2016… but it hasn’t exploded higher yet.
What’s more, commodities are ridiculously cheap compared to everything else in the world.
The last time commodities were this cheap was in 2001… and the CRB exploded 157% higher over the next seven years.
Keep an eye on these pages throughout 2018 as we follow the next upswing in the commodities supercycle…
Let us know if you’re investing in marijuana or other commodities—and how it’s going so far—right here. As always, we appreciate the feedback.