Colorado Marijuana Sales Top $1 Billion - Here's Your Profit Play

marijuana dividend stocks

Legal Colorado marijuana sales in the first eight months of 2017 topped $1 billion, but this is just the start of the marijuana gold rush for forward-thinking investors...

While sales for the first eight months of 2017 are already up 21% from $846.5 million during the same time a year ago, this is part of a larger trend. Over the last three years, legal marijuana sales in Colorado have increased each and every year.

Colorado marijuana sales

Total sales increased 42% from $699 million in 2014 to $996 million in 2015. Sales once again climbed double digits, from 996 million in 2015 to $1.3 billion in 2016. That's a 31% increase just last year.

But the growth in Colorado's marijuana industry is just getting started...

Why Colorado Marijuana Sales Are Just Getting Started

Marijuana sales in Colorado have been growing despite the fact that cannabis is illegal under federal law.

Even though marijuana is legal in the state, the federal law means banks won't lend to the marijuana companies out of fear of losing their investment. Banks won't even let these businesses deposit money with them. Without access to capital and banks, cannabis businesses remain limited in their growth opportunities.

That currently makes investing in cannabis stocks speculative. But it's only a matter of "when," not "if," federal marijuana laws are changed.

And that means the cannabis boom in Colorado is just getting started...

Now, we don't have a time frame for when cannabis would ever be legalized under federal law, but the trajectory points toward full legalization. Currently, 29 states and the District of Columbia having already legalized medical cannabis, and 60% of Americans support legalizing it, according to Gallup. Even Canada plans to fully legalize marijuana in 2018.

But you don't have to wait for full legalization to start profiting. In fact, you can begin profiting from the Colorado pot industry right now while you get in early on what could become an even more explosive market.

And we have a way to profit from the exciting growth of the Colorado pot industry without investing in cannabis companies. Without access to banks and growing competition, these companies could be too risky to own.

NEW: Plot your course to a seven-figure weed windfall with the top pot stocks from every ecosystem - growers, edibles, dispensaries, and more. Read more...

But our profit strategy is what we call a "pick-and-shovel" play here at Money Morning, and it all started with the California Gold Rush of 1848.

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Between 1848 and 1855, over 300,000 individuals went to California to try and make their fortunes mining the precious metal, according to History.com.

However, some savvy businessmen soon discovered selling the equipment needed to mine the gold was a safer way to profit than mining for gold itself. After all, not every miner found a life-changing fortune in gold, but they all needed shovels.

And just like these savvy businessmen, we have our eye on a pick-and-shovel profit opportunity in the Colorado marijuana market...

How to Profit from the Billion-Dollar Colorado Marijuana Industry

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Growing marijuana requires a lot of water.

Marijuana plants consume six gallons of water per day, according to a 2014 Mother Jones report. For example, if a cannabis farm grows 1,000 plants, that's 6,000 gallons of water needed per day.

In comparison, the average person in the United States uses 80 to 100 gallons of water per day, according to USGS.gov.

And because of the massive amount of water being used, our pick-and-shovel play is through a company that owns water rights in Colorado.

Two Rivers Water & Farming Co. (OTCMKTS: TURV) owns 7,376 of gross acres, according to Yahoo! Finance.

The company also owns the largest privately held on-stream reservoir in the state of Colorado. Its business strategy is to provide water to regions in the southwestern United States that are dry areas with little rain.

But it's water assets for the cannabis industry that we're focusing on...

Two Rivers leases its water assets to cannabis greenhouses through its subsidiary GrowCo. Through GrowCo, a cannabis grower can get a high-efficiency greenhouse built for them and access the water needed to grow their plants.

And because of its access to water, cannabis companies are lining up to work with the water company.

Two Rivers just signed a crop share agreement on Sept. 13, 2017, with an unknown hemp grower, according to a report from The Wall Street Journal.

It will lease up to six acres for high-quality CBD hemp plants, and the two companies will split the profit from the hemp production.

Now, because leasing land with water assets is still a new business model, the TURV stock price has been volatile over the last 52-weeks. It's traded for a high of $1.19 and a low of $0.23 during that time.

But as more companies need water assets to grow cannabis, the TURV stock price should see more investor demand. With more demand, the TURV stock price can climb.

The TURB stock price opened today at $0.37 per share.

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