Editor's Note: Last week, we introduced you to the new executive director of The National Institute of Cannabis Investors, Don Yocham. As Don told The Institute's members, he's honored to help you navigate this booming market in his new role. So today, he's back to talk about all the profit opportunities he's seeing in the cannabis sector in 2020. Here's Don...
Together, we stand at the cusp of a truly unique opportunity. Never before have everyday investors had such early access to the birth of an entirely new industry.
And never before has a new industry emerged with well over 260 million customers already in place - spending nearly $350 billion a year in both legal and black market sales.
Compare that figure to the current $20 billion legal cannabis market and you can clearly see a wealth-building opportunity that has a lot of room to run.
At the pace that recreational use is getting legalized, that $20 billion market has to grow at 80% per year just to keep up.
Revenue surging at 80% per year for a brand-new industry is completely unprecedented.
With much of the road paved with existing demand, and because of the current lack of federal regulations, everyday investors like you have the chance to get in on the ground floor.
It's a truly historic opportunity - and I get the pleasure of helping you make the most of it.
Here's how I plan to do that for you... [mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
The Untapped Potential in the Cannabis Market
You've heard us talk about the U.S. cannabis market being valued at $1 trillion, but the global market for cannabis could easily reach four times that size.
That's $4 trillion in market value for global cannabis stocks - a long way from where cannabis market values sit now.
The promise of 263 million users spending $350 billion per year forms a massive foundation upon which to build an industry. And that base is primarily recreational use.
Moving those revenues from black-market deals to company revenues equals fantastic profits for early investors.
And a $350 billion market growing at 15% per year is just the start of it.
Next, you have to consider the potential for the medical market.
Medical cannabis helps treat a number of conditions. These range from things like neck pain, forms of dementia, anxiety, epilepsy, and Parkinson's disease. We're talking about a market of over 1 billion people.
Adding just one in five of those billion people to the cannabis market swells the ranks by another 200 million, shooting cannabis-derived revenues to over $600 billion per year.
And that just barely scratches the surface of the medical potential of cannabis.
Medical research into the benefits of cannabis has a long but limited history. Now, with marijuana stigma disappearing - and the potential to be more readily accepted - everyone from university research departments to pharmaceutical drug developers are getting into the act.
Take one of the private companies I recommended to my Cannabis Venture Syndicate members. It has developed a tailored CBD molecule, soon to enter phase 2 trials with the U.S. Food and Drug Administration (FDA).
This new drug not only seems to stop nerve damage, but seems to repair it, too. This has tremendous implications for those afflicted with a nerve-damaging disease like multiple sclerosis. And because it repairs nerve damage, this drug could even provide a cure.
Pharmaceutical drugs are a massive market. Prescription drug sales will soon surpass $1 trillion per year, and drugs derived from cannabinoids will carve out an ever-increasing share of that spending.
To the existing recreational base, medical cannabis, and pharmaceutical applications, we must also add recreational demand from new consumers.
As normalization takes hold, new products become available. And that only adds to the market potential by piling on a new set of buyers.
THC-infused beverages, edibles, and vapes appeal to a much wider audience. And legalization removes the stigma of consumption.
For some, these cannabis products provide a better alternative to alcohol. And the threat that legal cannabis consumption poses to alcohol sales explains why behemoths like Constellation Brands Inc. (NYSE: STZ), Molson Coors Brewing Co. (NYSE: TAP), and Anheuser-Busch InBev (NYSE: BUD) are looking hard - and investing big - in cannabis stocks.
Lastly, to all of this, we need to add in the demand coming down the pike from the promise of CBD.
Demand for CBD Continues
This market was virtually non-existent three short years ago. But now, it's everywhere.
By 2022, most estimates project the CBD market to reach $22 billion. It's starting from a much smaller base of demand than cannabis, but clamor for CBD tinctures, vapes, edibles, and infused beverages is growing even faster than the legal cannabis market.
The 2018 Farm Bill passed just over a year ago, and CBD spent 2019 entering the consciousness of consumers. A year later, almost everyone has heard of it. CBD products have popped up on shelves across the country. And I'm not just talking about gas stations and head shops. I'm talking about major drug store chains, convenience shops, and grocery stores.
To see this potential, take another pick I made for our Cannabis Venture Syndicate members. It's an upstart beverage company beginning to sell CBD-infused sparkling water across the country. Its lead beverage has hit shelves in 7-Elevens, can be found in the rooms of upscale resorts, and will soon be for sale in the largest grocery store chain in the country.
It's a tiny startup now, raising capital privately. But once sales kick in - and they will - I wouldn't be surprised to see this company get bought out for over $700 million. That's 35 times its current valuation.
With such a wide-open field of opportunity, you can see why I'm excited about helping you navigate your path to unprecedented wealth as the industry speeds toward becoming a $4 trillion global market.
And before I go, I want to show you another way to navigate toward cannabis profits...
The National Institute for Cannabis Investors has compiled all our best resources and put them together in one easy-to-read book, geared toward turning you into a cannabis investing expert.
Inside you'll find 12 essentials to evaluate before investing in any cannabis stock, six ways to avoid penny stock scams, and much more. Fact is, this 2020 Pot Profits Roadmap can make cashing in on the cannabis revolution the fastest fortune you'll ever make.
To learn how to get your free copy of this invaluable resource, just click here...
Follow Money Morning on Facebook and Twitter.
About the Author
Don Yocham is Executive Director for the National Institute of Cannabis Investors (The Institute) and Director of Cannabis Investing Research for Money Map Press. Before starting his role with the Institute, he was the Head of Private Deals for the publication Cannabis Venture Syndicate. From his first foray into the trading pits of Chicago to introducing institutional investors to entirely new markets in the early 2000s, Don has pretty much covered the entire field of investing in his 25-year career. In the depths of the financial crisis, when the typical investor had lost more than half of their money, his portfolios were up.