No matter how you slice your wealth pie, make sure you allocate funds to the cannabis industry.
At present, many of the world’s stock markets are trading close to all-time highs, so opportunities with the safe-plays of the world are scarce.
3M, for example, a company whose products we all use, will likely return about 7%-8% annually, save for a major market panic similar to 2008, which made it generationally cheap for the first time since the Dot.Com bubble burst.
In 2009, 3M’s price was $50; today it’s bidding for $200. There is no reason to believe it will ever become that undervalued again without widespread panic.
Coca-Cola, responsible for the fact that Warren Buffett is the richest investor of all times, will return a modest 7%-10% in the future, as it stands. In 1987, Buffett brilliantly capitalized on the Black Monday sell-off, buying up shares like a hog in sight of food.
Johnson & Johnson is likely to also return only 9%-10%. Though, in 2009, I was able to buy shares at $65 and double my money in nine years, not including dividends (an 8% return), so with nine years of dividends, it comes out to about 12% annually. These types of elevated returns (20%-30% above historical averages) will not continue to exist, going forward.
Colgate-Palmolive and Procter & Gamble are projected to return 10% as well.
Making 12%-14% returns with the big names will not be possible. I expect most stocks to hardly beat inflation over the next decade, but growth, even hyper-growth, is coming to one industry, cannabis, which will be among the key drivers of job creation the world over.
If you’re still worried about the social ramifications of legalizing this plant, I highly recommend a trip to Colorado or a trip to Canada in a couple of months.
Not only will you start to see cannabis products on Amazon, at Walmart, and online soon, but I believe that the major pharmaceutical companies will want to crack the whip on finding out the benefits of the plant, and this is only the beginning.
What should excite you is this:
- Over 82.6% of
existing consumers still haven’t switched to the legal market.
- Canada’s full legalization in the summer is the most pressing catalyst there is for the Federal legalization on the U.S. front.
One thing that cash-strapped states in the U.S. cannot afford to lose out on is tax revenue, and one thing the Federal government cannot tolerate is allowing Canada to get a heads-up on job creation, especially with big salaries.
The U.S. has more incarcerated citizens, as a percentage of the population, than any nation in the world.
Decriminalizing cannabis has helped Colorado become a robust economy with 18,233 new full-time jobs and hundreds of billions of dollars in annual tax revenue.
Investments have flooded the state and helped to drive up the quality of life and secondary industries, as well as pushing down prices for cannabis products.
- Not even one company controls more than 1.3% of the industry.
This shows you how early in the game we are.
You haven’t missed out on anything. Yes, early adopters have made money, but the tidal wave of money is only getting started.
I have allocated 13.4% of my portfolio to cannabis investments. Currently, I’m looking at technology-driven companies in the sector, which do not compete with others over production or manufacturers, but are looking to help all the growers to modernize, as they will need to meet the standards of government agencies and consumer-protection groups.
Research the 1930s, as it pertains to the wealth generated by investors making savvy choices with the early alcohol producers. You’ll quickly realize that Canada’s legalization this summer is equivalent to the introduction of mineral water to the marketplace 30 years ago, which then caused a rush of thousands of new companies into the industry, making billions of dollars for early investors.
A huge social, economic, regulatory, commercial, and agricultural riches gate is opening, and I’m on the ground, making introductions, finding our next big play.