Older folks - including all those baby boomers reaching retirement age - are confronting a slew of age-related ailments, including glaucoma, cancer, arthritis, and back pain.
Cannabis-based remedies, as researchers are discovering, are uniquely suited to treating those diseases.
In other words, because of marijuana's newly understood medicinal properties, it's changing "How We Thrive" in the Singularity Era.
As that elderly population grows - and as it begins to grasp how well cannabis works to treat numerous diseases - so will the size of the medical marijuana market. And as I've been telling you in recent days, that makes legal marijuana one of the biggest profit opportunities I've ever seen.
In fact, "It is the biggest thing I've ever seen."
That's not me talking - but the CEO of a Fortune 1000 firm who's got a plan to "invest, like, half a billion in the pot business."
This move may have been risky - but it's looking like a success.
The company's first two "pot acquisitions" have already increased sales by more than 20%. That's nearly four times the growth rate of the rest of the company, and operating margins are on track to be about 30% higher than the company average.
Plus, the firm's profits are up 50% in the last four years.
And its shares have increased 33% in the past year, compared to 1.5% growth for the S&P 500.
So, as more and more states legalize cannabis, this company's shares will soar 30% in just the next 12 months... and beyond.
And so will its shareholders' profits...
Cannabis Capitalist
While the legalization of marijuana is creating the need for acres and acres of professionally grown cannabis, you shouldn't forget the little guy.
After all, for decades thousands of consumers have been growing their own, even while risking trouble with law enforcement. By one estimate, $60 billion worth of illegal pot is grown each year in the United States.
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But with marijuana legal, the number of people looking to cultivate it for their own consumption is likely to skyrocket.
The marijuana-growing market could easily top $100 billion within five years, with much of that supply displacing imported marijuana from dangerous jungles in Latin America.
And while this opens up an opportunity for firms that cater to growers and gardeners, it also presents those firms with a strategic dilemma...
- Should they establish a strong early presence in the pot-growing community?
- Or wait until the social climate around cannabis normalizes - that is, until growing your own pot is no more controversial than brewing your own beer?
The Scotts Miracle-Gro Co. (NYSE: SMG) is going with Option 1: Embrace this fast-growing community of growers and, by doing so, "plant the seeds" for robust new paths to growth.
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Scotts is already the world's largest maker of lawn-care and gardening products, and is now making a big push into indoor plant cultivation, as evidenced by its April 2015 $150 million purchase of General Hydroponics and other pot-related acquisitions.
"Hydroponic" gardeners use air, light, and water to grow their plants indoors - without the need for soil. This method means no mess and, more importantly, no pesticides. That's a key consideration for green consumers.
Given the unsettled legal landscape around cannabis, Scotts' emphasis on that market might seem like a dangerous choice. But in truth, it's less risky than it seems.
If the legal marijuana movement stalls, Scotts will still benefit from the growing demand for hydroponic equipment among young urban consumers eager to grow the herbs and greens that go into their salads.
But it's hard to imagine the push for legal marijuana stalling out. In many respects, that genie has left the bottle.
Indeed, neither candidate in this year's presidential election has said that legalizing pot is a bad idea. Both Donald Trump and Hillary Clinton understand that legal pot has created robust new tax-revenue streams for states like Colorado and California and will likely do the same for any other states that get in on the action.
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Even before legal pot made this new growth potential possible, hydroponics had been very popular with a whole array of growers.
According to the smart-grid energy analysts at Manifest Mind LLC, the global crop value of hydroponically grown plants is on pace to rise from $17 billion in 2013 to $24 billion by 2018.
If other countries follow the lead set by the United States, pot cultivation - and hydroponics - could well soar much higher than that.
Five Reasons
There are many reasons why Scotts Miracle-Gro should embrace hydroponics.
- Populations are increasingly concentrated in cities and even mega-cities. As people trade the countryside for the cityscape, they'll have to grow their favorite herbs and vegetables indoors, using hydroponics.
- There is the perennial concern over pesticides; a number of pesticide bans have begun to take effect. Hydroponics, as we said, needs no pesticides, because it uses no soil.
- Water shortages are a growing problem around the world and make growing crops harder. Hydroponics uses controlled, "drip" irrigation, which drastically reduces the amount of water needed to grow plants.
- Scotts bought into the hydroponics equipment field simply because it's a very attractive business, with much higher profit margins than traditional lawn and garden supplies.
- There's the happy fact that demand for hydroponics systems stays strong year-round.
Scotts CEO Jim Hagedorn - the man I quoted earlier - isn't just dipping his toe in the water here. He sees last year's purchase of General Hydroponics as just the first of several moves, all aimed toward the goal of creating a $1 billion yearly business.
Since then, Hagedorn spent $135 million last year on two businesses that sell fertilizers, soils, and accessories to marijuana growers - and $136 million earlier this year for 75% of Dutch hydroponics lighting company Gavita Holland BV.
Those are some nice bolt-on additions for a business that currently generates around $3 billion in sales.
Hagedorn is a big believer in market share, and he likely looks at the emerging hydroponics and cannabis markets the same way. Its four leading brands (Scotts, Miracle-Gro, Roundup, and Ortho) have market shares ranging from 53% to 70%.
And the firm is out to make it easy for people to start using hydroponics equipment in order to grow either cannabis or food. Scotts Miracle-Gro has 2,500 sales associates that fan out to retail stores, after they've learned the merits of hydroponics.
Make no mistake: This is not your typical cannabis investment.
For one thing, Scotts is already quite popular with mutual fund managers, who like the fact that the firm has boosted its dividend for seven straight years. The current yield sits at 2.25%.
If you are building a well-rounded Singularity Era portfolio, Scotts is a clear choice to anchor the low-risk portion of the "How We Thrive" spectrum.
And its early move to embrace the cannabis community could help turn it into a robust grower.
This Could Make a Lot of Americans Very Rich: Legalizing booze created dynasties and massive fortunes. Now when this prohibition ends, it could eventually put $200 billion in the pockets of Americans from coast to coast. Find out how you could be one of them...
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About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.