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On Nov. 24, the Dow Jones Industrial Average crossed 30,000 for the first time in its 124-year history.
The S&P 500 was right there beside it, closing above 3,600 for the first time ever the week before.
All-time highs like this are as clear a sign as any that investors have moved on from the COVID-19 panic and are now looking forward to what lies ahead for U.S. companies.
Find out the top five stocks you should consider owning today and dozens of stocks you should drop immediately by clicking here now.
But these recent gains are only showing us part of the picture. The indexes would be – and should be – even higher…
You see, most investors are focused on Salesforce.com Inc.'s (NYSE: CRM) 62% year-to-date returns, or Apple Inc.'s (NASDAQ: AAPL) 58%, or Microsoft Corp.'s (NASDAQ: MSFT) 35%… these all helped carry the Dow to its current high level.
But if the Dow included the hottest sector in the United States right now, it would've hit a record high months ago.
I want you to focus on this sector, how it's moving even faster than these mainstream stocks, and how it can hand early investors plenty of high-profit opportunities…
This "Off the Radar" Sector Will Keep Hitting All-Time Highs
The sector I'm talking about is cannabis, of course.
More specifically, cannabis companies selling pot legally to American consumers.
These are the multistate operators (MSOs) – the vertically integrated companies giving people the product they demand in state after state through grassroots ballot measures and legislative action.
Companies like Trulieve Cannabis Corp. (OTC: TCNNF).
The gains Trulieve saw this year didn't just recover COVID-19 losses. Rather, this stock has moved past the entire cannabis bust of 2019 and is now soaring to all-time highs. At $30, it's nearly twice as high as the previous record set way back on Oct. 3, 2018.
Green Thumb Industries Inc. (OTC: GTBIF) has nearly staged a full recovery, too. Its stock has doubled in price this year and sits less than 13% from the highest previous close ($23.16) it saw on Sept. 18, 2018.Source: National Institute for Cannabis Investors
And Jushi Holdings Inc. (OTC: JUSHF), a relative newcomer to the cannabis space, is up 179% year to date (YTD) to $4.
Source: National Institute for Cannabis Investors
Had any of these names been in the Dow, it probably would've hit 30,000 much faster.
But when it comes to the cannabis sector, these gains are also only a small representation of the much bigger picture.
Waking up to Cannabis's Full Potential
You can get a good look at how the cannabis industry is performing more broadly with our U.S. Cannabis index, which tracks the performance to the top U.S.-based cannabis companies by market cap. As a group, these companies are up 53% for the year.
Meanwhile, the Dow is up just 3.47%.Source: National Institute for Cannabis Investors
But even that incredible performance hides the real winners. Zoom in on the top 10 performing MSOs, and you're looking at average gains in excess of 110%.
Compare that to Salesforce, Apple, and Microsoft, which average 51.67% in total gains.
And by the end of next year, all of those gains in cannabis stocks will be in the range of 10 to 20 times what it costs to get into the top cannabis companies now.
Clearly, more investors are looking past the "bust" phase of cannabis and to the "boom" that's underway. Here's what I mean by that…
Cannabis stocks bubbled going into 2018. They peaked in October and sold off through the end of the year before recovering somewhat through April of 2019.
And then the bust began.
Cannabis stocks sold off relentlessly for the next 11 months, compounded by the stock market's initial reaction to COVID-19, and ended with most cannabis stocks at 20% of their peak value.
This bubble-bust pattern in cannabis mirrors what happened in every hot new sector to hit the scene in the last 180 years.
It's like a good omen – and you don't want to ignore where it's pointing you.
Because after the Internet bust, it took years for most investors to give those stocks another look. But by then, much of the gains had already been made. And I'd bet those that waited wish they had a time machine right now.
But you don't need a time machine to catch the cannabis boom.
You're here at the forefront of the single biggest market to emerge in decades, and there's never been a better time to make your move. All you need to do is put your money in the stocks that are going to ride this boom to the top.
And the "proof of the boom" is in the numbers. Investors are seeing revenue doubling every few quarters. They see the capital invested in the past paying off for those management teams that managed their capital well. And they don't want to miss how stocks react to surging revenue, soaring profits, and a sector that looks far less risky than it did in the past.
And cannabis sales are absolutely surging.
Across all publicly traded cannabis companies, revenue for the latest quarter came in at about $2.7 billion – a 60% increase in quarterly revenue in just nine months, which is a growth rate that you'd be hard-pressed to find in any other industry.
While I'd peg the cannabis industry growth at 60% for the first nine months of 2020, that's just an average. Take the top twenty publicly traded U.S. cannabis companies, and revenue has surged 87% higher so far this year.
Even among the top sellers in the industry, stark differences emerge among which companies can deliver and which have proven they can't compete.
For example, Trulieve is a company that has delivered profits to shareholders since day one and has seen sales surge 93% to $136 million in a single quarter.
Curaleaf Holdings Inc. (OTC: CURLF), now the biggest cannabis company in the world, generated $182.4 million in revenues during the third quarter, thanks to its Grassroots acquisition closing back in July. That's nearly three times more cannabis sold compared to the final quarter of 2019.
But the title for the largest year-to-date surge goes to Cresco Labs Inc. (OTC: CRLBF), a strong multistate operator (MSO) with a heavy focus on the Illinois market that increased revenue 339% to $153.3 million last quarter.
These numbers are impressive.
So you see, revenue, profits, risk; having these three factors aligned in the right direction creates the most powerful tailwinds to investing in stocks.
You can see them converging right now behind the stocks of the U.S. cannabis companies like the ones mentioned in this article that know exactly how to play their cards.
Whether cannabis companies are part of the Dow or not, the market is slowly but surely waking up to the industry's potential.
And you do not want to be left behind.
Because when the first cannabis company joins a major index – something that's well on its way – you'll want to be reveling in how much you made as an early investor…
… Not regretting how much you could've made.
So, be the early investor. You (and your portfolio) will be happy you did.
Learn how to get started with 13 of my top pot stock recommendations right here.
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.