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John Mackey, CEO of Amazon.com Inc. (NASDAQ: AMZN) subsidiary Whole Foods Market Inc. recently sat down with a reporter from The Texas Tribune.
The reporter bagged a great quote – and we investors got quite an earful, too. It's worth us taking a minute to parse out, because there are real implications for our marijuana investments.
Mackey was talking with the Tribune about the possibility of carrying cannabis products in his stores: "If cannabis is ever passed in Texas, chances are good that grocery stores will be selling that, too."
And it seems Mackey may even be open to a variety of products. When asked whether we would ever see cannabis edibles in a Whole Foods outlet, Mackey said, "Let's see what happens with the market and the government regulations over time."
Financial journalists have been making a lot of hay over these statements, and that's understandable.
After all, if cannabis were available in major grocery stores, the potential profits for any party involved would be incredible; it would certainly be a turning point in cannabis' lucrative journey into the American mainstream.
I agree that it's fairly likely we'll see cannabis products in grocery stores in the near future. But there's a caveat: The "arrival" is going to play out a little differently than everyone – Mackey included – may be thinking.
Investors had better get ready, because it's going to play out like this…
It's Easy – Look to Liquor for Clues
Old habits die hard, and it's important to remember how, well, new cannabis is as a legitimate recreational product. The very first legal cannabis sale did not occur until just six years ago.
The very legislators and bureaucrats charged with regulating this new industry were often deeply invested in the war against cannabis just a few years ago.
THREE STOCKS: Any one of these cannabis companies I've researched could potentially deliver a 1,000% windfall. Click here to learn more…
While some may be recent converts to the benefits of legal cannabis, they aren't ready to allow cannabis products to be sold alongside cigarettes at the grocery store… even though we all know those cigarettes are incredibly hazardous to human health.
So let me be frank: It's going to be a very, very long time (if ever) before you see "Alice B. Toklas" pot brownies in the Entenmann's case or next to the Little Debbie snack cakes.
In fact, your best chance of buying THC products from Whole Foods wouldn't actually be inside the store at all.
It's much more likely, I think, that Whole Foods would open cannabis dispensaries or retail outlets adjacent to its grocery stores. This model is already in use for liquor stores connected to other groceries, like you'd find at Wegmans. Many states don't allow the sale of alcohol within grocery stores, so these affiliated retailers act as a sort of loophole, allowing the parent store to boost profits without running afoul of any state regulations.
It may be some time before state and local legislatures determine regulations that would allow for a grocery-adjacent dispensary, though.
And it's doubtful the first of those would appear in conjunction with Whole Foods, a company headquartered in a "red" state that has yet to legalize even medical cannabis use.
But I do believe there is a far likelier way for Whole Foods to profit from the cannabis industry, and by now, you'll be very familiar with it.
This Compound Is the High-Profit Key
In the end, what you are most likely to find on the shelves of a Whole Foods – or any other grocery store – are cannabidiol products, more broadly known as "CBD."
It's convenient, then, and thoroughly unsurprising, that Whole Foods itself listed "next-level hemp" as one of its "top 10 food trends for 2019."
Of course, as I've said before, the U.S. Food and Drug Administration (FDA) wants to keep CBD out of food products simply because it is a regulated drug.
(Note: Subscribers to my free Cannabis Profits Daily research will get a report from me on the FDA's approach to CBD. No investor can afford to miss this – go here to subscribe at no charge.)
But CBD holds incredible potential as a "nutraceutical," or dietary supplement, alongside capsules of omega-3 fatty acids and vitamin D3 pills.
That health-oriented market is squarely where many of our key Cannabis Investors Report model portfolio picks have staked their claim – and reaped the beginnings of a massive wave of profits.
The health properties of CBD are too great to ignore, and with the passage of the Farm Bill, hemp-derived CBD enjoys a federal legality that all other segments of the cannabis sector currently lack.
So even in Texas, a state that has taken no measures to legalize marijuana, low-THC/high-CBD cannabis is perfectly legal.
Even as headlines dominate the news cycle with talk of a New York City CBD ban and the resignation of a CBD-friendly FDA head, the smart money continues to bet on this sector – and our Members will continue to get the chance to profit from it.
Ultimately, the opportunity CBD presents to grocers like Whole Foods is too great to ignore, and you should not be surprised if you see one of our model portfolio Members on the shelf of a grocery store very soon.
These 3 Stocks Are the Key to 2019's Greatest Profits
The 2018 midterm election was a turning point for the cannabis industry.
We expect nothing short of historic profits by the end of the year.
But not all pot stocks will hand you life-changing wins. In fact, often the companies making headlines are least likely to see the biggest gains.
These three stocks, on the other hand, are flying under the radar… for now. Each of them could see exponential stock price acceleration at any moment, and if you get in before that happens, you could turn a token stake into a lifetime of wealth.
I don't know of any other sector providing anywhere near this level of growth now.
About the Author
Greg Miller started working on Wall Street in September, 1987, just a month before the “Black Monday” stock market crash.
During his career there, he became an expert in just about every kind of publicly traded security - from blue-chip and small-cap stocks to municipals, junk bonds, and derivatives. As a portfolio manager, Greg was responsible for over $500 million of assets in mutual funds and insurance company accounts.
After leaving the Street, he designed a successful options trading strategy and made lucrative tech investments for a financial publication. He has also helped develop new products and worked with other editors to hone their strategies. He’s always been dedicated to deep, fundamental research - and he always will be - because he believes buying the very best companies at the right price is the best way to amass wealth in the stock market.