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The marijuana market as a whole is a lot like the Grand Canyon - it looks fantastic up close, but from a distance, it's absolutely breathtaking.
Last year, total marijuana sales - legal and black market - in the United States topped $86 billion. In 2018, all across the country, nearly 49 million people spent an average of $1,755 each on marijuana.
The thing is, some $68 billion of that was from totally illegal black market sales.
But that still leaves us with around $18 billion in legal transactions. For comparison, that's about the size of the U.S. urgent care healthcare segment in 2018.
So the "$68 billion question," as it were, is how quickly that "legal gap" will close and start putting mega-profits in pot stock investors' pockets.
The short answer: much faster than anyone out there is predicting. Bringing illicit sales into the legal "light" doesn't require convincing new customers to try something new; no new consumption habits need to be formed.
It's a well-established market, full of folks just waiting to fork over their money.
And they will fork it over by the truckload...
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.
Good article. Got a question I need you to answer. IF an investor buys this stock, since they are in Canada, if the stock goes up, doesn't the investor have to pay Canadian taxes? What about US taxes if they have holdings in the US?
Hi, Keith,
Thanks for writing. Let me start by recommending you check with your tax preparer or financial advisor before making a move, That said, the tax situation will depend on where the shares are trading. Plenty of Canadian cannabis companies trade over-the-counter (OTC) in U.S. dollars IN the United States, in which case you've just got U.S. taxes to consider. But if the shares trade exclusively in Canada, you'll likely have to pay Canadian taxes.
Canadian dividend-payers are a different story altogether; their situation is covered by a U.S.-Canada treaty and the calculations can be complex. On the other hand, few if any Canadian marijuana stocks actually pay dividends. This is definitely a situation where you want to proceed on the advice of a tax professional.
Thanks again,
The Editor