The days when marijuana "edibles" were limited to a bunch of teens passing around a pan of homemade pot-laced Duncan Hines brownies are long over.
The legal marijuana industry now grosses more than $5.4 billion a year through the sale of cannabis-infused food and drinks - for people who want to avoid the harmful effects of smoking, but still want the drug's potent effects. And as marijuana continues its march to legalization, that number will continue to climb.
Over the past several decades, "edibles" have become one of the most lucrative legal marijuana opportunities on the market.
I want to show you one of my favorite speculative plays in this booming pot-stock niche right now. I recommended it last September in my Nova X-Report "weed investors' bible," The Roadmap to Marijuana Millions, and some of the peak gains we've seen here have been extraordinary.
I can't think of a better way to show everyone the massive profit potential in legal weed investing...
Edibles Are a Huge Slice of Marijuana Business
The Colorado Department of Revenue reported that, in 2014, 5 million marijuana edibles were sold in the state. And according to The Denver Post, marijuana-infused edibles account for roughly 45% of the legal marijuana marketplace. A February report by Bloomberg says that edibles account for 50% of the revenue earned by Colorado dispensaries.
Just look at so-called "microdosed" edibles - one of the fastest-growing sectors of the industry.
Microdosed products - from marijuana-infused chocolates and sweets to barbecue sauce and bottled water - contain just five to 10 milligrams of tetrahydrocannabinol (THC), the psychoactive ingredient in marijuana that gives you the high. With such small doses, eaters feel the beneficial aspects of marijuana but generally won't get the unwanted side effects, like feeling "too high."
Dr. Dustin Sulak, the medical director for Integr8 Health in Maine, has been exploring the benefits of microdosed edibles with patients.
Last year, he told United Patients Group, "I discovered that most people have a certain threshold dosage of cannabis, below which they'll actually experience a gradual increase in health benefits over time, and above which they'll start building tolerance, experiencing diminishing benefits, and more side effects." Dr. Sulak explained that he has witnessed cancer patients respond much better to lower doses than the usual higher dose recommended - while emphasizing the need to experiment as each individual is different.
On the consumer front, companies like Kiva Confections are revolutionizing the microdosing game. Kiva Terra Bites, for example, are bite-sized candies coated in milk and white chocolate infused with marijuana extract. A tin averages $18 and contains 24 servings.
Now, Kiva is a small, privately held business, one I'm watching closely because it may go public in the future.
But there are investment opportunities aplenty in the edible market. Here's one I really like...
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This Is One of My Favorite "Edibles-Plus" Plays
Nevada-based Cannabis Sativa Inc. (OTCMKTS: CBDS) makes and sells a range of herbal-based skin-care products including salves, balms, and lotions. Incidentally, two-time Libertarian Party presidential candidate Gary Johnson was part of the group that helped get the company off the ground back in the mid-2000s.
But by far, it's most exciting and lucrative line of business is edibles. The firm's Hi-Brand's International Inc. subsidiary is a major player in the segment.
But it has a lot more going for it.
The timing is excellent.
You see, there is no national marijuana "brand" yet, and no major retailer has a foothold in this market. Therefore, Cannabis Sativa executives see the opportunity to make their stores like the Apple Store in terms of user friendliness, pleasing signage, and range of products.
State governments, especially those where marijuana has recently become legalized and regulated, stand to benefit immensely from these kinds of businesses, both in job creation and tax revenue. In Colorado, one of the first two states to take recreational marijuana above-board, stores pay a retail and medical sales tax of a 2.9% along with a 10% retail marijuana sales tax and a 15% marijuana excise tax.
Beyond its push into edible products and store franchises, Cannabis Sativa has also patented a unique strain of pot, something they call "Ecuadorian Sativa," or "CTA."
CTA is one of very few weed strains recognized by the U.S. Patent Office, and according to The Los Angeles Times, the company fought for seven years to get that patent. It's a hybrid plant, composed of strains from (you guessed it) Ecuador, for consumers who seek what the firm calls a "ceiling-less high."
Translation: It's potent stuff. Really potent.
What's more, Cannabis Sativa has a bold leap into the "social e-weed" niche with its app "iBudtender." Developed by subsidiary iBudtender LLC, this "Yelp of recreational marijuana" offers a directory of thousands of dispensaries, cafés, etc., through which users can locate and educate themselves about certain establishments. It also has voting and review systems (much like Yelp) that allow customers to recommend (or, alternatively, pan) each establishment. In turn, the establishments can interact with customers.
IBudtender is getting rave reviews from users and industry players alike.
But, even better, this platform gives the company the opportunity to jump from state to state as legalization spreads and expand into rapidly growing markets at a low cost.
Now, this is a speculative play on a micro-cap stock - just $93.6 million. This isn't a weed stock to bet the farm on, so make sure you're using appropriate capital when you buy. This is likely going to be a volatile ride. Investors have seen peak gains of 73% here. That's simply irresistible.
Michael makes sure every single one of his Nova-X Report readers gets a copy of his "weed investors' bible," The Roadmap to Marijuana Millions. It has the recommendation you've just seen, plus an incredible 30 more meticulously researched pot-stock picks in a market with tens of billions of dollars in untapped potential. Click here to learn how to get your copy.
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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.