We've talked about some of the last hurdles the cannabis industry has to clear before it can achieve two important, related goals:
1) Reach its full, projected $146 billion potential.
2) Hand investors returns that could ultimately dwarf everything that's come before.
Of course, the descheduling and legalization of pot at the federal level would take us a long way toward clinching those ambitions.
But almost as importantly, marijuana businesses need free and full access to the banking sector, just like any other legitimate American enterprise.
As it stands now, cannabis firms - completely legal in their respective states - cannot use banking services, because the money would cross state lines and expose both the business and the bank serving it to federal racketeering and money-laundering charges.
As we've discussed, this forces marijuana companies to operate on a cash-only basis, which brings with it a slew of unique and, more importantly, expensive challenges; those "challenges" are essentially taking money out of shareholders' pockets.
Some small, regional, and local banks have boldly stepped in to serve these perfectly legal businesses, but the approach has been more or less piecemeal.
Well, a monumentally important congressional vote on Friday stands to change all that. It's going to change everything, in fact.
This is the "light at the end of the tunnel"; it's confirmation that our investing approach is fully sound.
Most of all, it's the clearest signal yet that mammoth profits await those pot stock investors who move right now...
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It's Never Been Safer to Make Money in Marijuana
On Friday, March 29, H.R. 1595, better known as the Secure and Fair Enforcement (SAFE) Banking Act, passed the House Committee on Financial Services in a 45-15 vote - flying colors in these divided times.
It's a welcome development - not only for marijuana investors, but also for anyone who likes to see all-too-rare bipartisanship in action.
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Democrats and Republicans alike have come to grips with the fact that cannabis legalization is an unstoppable force.
The bill will now head to the House floor. This will be the first time in American history a piece of federal cannabis reform legislation has reached this level.
And with an astounding 152 cosponsors, the SAFE Banking Act seems all but totally certain to move on to the Senate in short order.
Since day one - the founding of the National Institute for Cannabis Investors - I've been saying it's only a matter of time before banking becomes available to the legal weed sector.
And before this bill passes, I want to make sure you're in the best position possible to make a fortune from these massive legislative changes.
That's because this is almost certainly terrific news for stocks like our first pick, Innovative Industrial Properties Inc. (NYSE: IIPR), a first-of-its-kind marijuana-centric real estate investment trust (REIT) that's delivered gains as high as 124.7% since Oct. 24, and it should be even bigger news for firms like Canopy Growth Corp. (NYSE: CGC).
It's tough to overstate the potential here...
Getting Cash off the Streets (and into Investors' Pockets)
Rep. Ed Perlmutter (D-CO) introduced the bill. "Thousands of employees, businesses, and communities across this country... have been put at risk because they have been forced to deal in piles of cash," he said in a statement. "The SAFE Banking Act is focused solely on taking cash off the streets and making our communities safer."
Safety may be the sole focus of the act, but if this bill does become law, it will have far grander implications for the entire industry.
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Currently, the vast majority of banks and major financial institutions do not lend money to companies in the cannabis industry.
By removing any possibility of federal prosecution, the SAFE Banking Act would not only allow cannabis companies to put their cash in banks, but also access cash from those same banks.
That grows businesses and increases shareholder profits, but this would also bring a new and very lucrative credit market into being.
Because as legendary investor Danny Moses of "The Big Short" fame said: "If you were to get debt to come in, the cost of capital would go down dramatically for these companies." Where the housing market was under-regulated and over-leveraged ahead of the 2008 financial crisis, he said, the cannabis markets today are over-regulated and under-leveraged.
Moses was also quick to point out that while "shorts can only go to zero - longs can go to infinity." That's why he called cannabis "the big long."
In other words, in an industry on the verge of an explosion, the passage of the SAFE Banking Act would light the fuse.
Remember, even before the SAFE Banking Act, Rep. James P. McGovern (D-MA), Chair of the U.S. House Committee on Rules, said he expects the chamber to vote on an end to federal cannabis prohibition "in a relatively short time, within the next several weeks."
I'll be back next week to show everyone what that bill could look like and why it would have a very good chance of strong bipartisan support.
The political landscape is changing at a rapid clip. The National Institute for Cannabis Investors is here to help you navigate it - and to show you how to make a fortune along the way.
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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.