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Editor's Note: Stocks are up an incredible 65% from the March 2020 lows, and, as the recovery gathers steam in 2021, we're calling for the S&P 500 to hit 4,250 or more in 12 months. We think some sectors could do even better than that in the year ahead. We don't want our readers missing out on a nickel of profit, so in the next few weeks, we're going to send you our best predictions for defense and technology, cryptocurrency, stocks to buy, trading opportunities, and much more. Keep your eyes on your inbox...
During a 26-year professional investing career that started in the bloody trading pits in Chicago, I developed a knack for identifying the biggest profit opportunities and the "sparks" that could ignite them - long before they hit the radars of the "Big Money" players of Wall Street.
And in my most-recent role - as the head of the National Institute of Cannabis Investors (NICI) here at Money Map Press - I've become a specialist in one of the single most promising sectors of the "new" economy...
Cannabis.
In my experience, too, too many regular investors are hidebound by the cliché views of cannabis as an outside-the-law, black-market business. The fact is that cannabis is poised to make regular, everyday investors a mint as it revolutionizes the Big Pharma and biotech sectors, the wellness industry, the food-and-beverage segment, and even private-equity markets.
Cannabis is at a point where revenue is growing so fast that some leading companies are doubling their sales every 23 months.
And the investors who recognize this now - and act immediately - will position themselves as a new class of millionaires over the next year and the years to come.
That's because this is right now a microcap business with $20 billion in fully legal U.S. revenue and a miniscule public-market value of $76 billion. (The private market value is north of $130 billion; that will serve as a catalyst in and of itself, creating future publicly traded companies.)
Now, the surge of growth I'm predicting in 2021 will continue for years to come, thanks to three very specific and identifiable catalysts I'm going to show you right now.
And you stand to reap a direct benefit from the two stocks I've picked out for you in this forecast...
Cannabis Catalyst No. 1: The Sales Surge
Make no mistake: Cannabis is the single fastest-growing economic sector in the market.
It's an economy unto itself, one that contains billions worth of greenhouses, extraction facilities, dispensaries, R&D operations - as well as the cash to finance it and the demand to spark the sales.
This infrastructure is what will transform millions of rows of green cannabis plants into the "green" wealth investors hunt for.
All that's needed is the catalyst to ignite a boom in cannabis stock prices as extreme as its growth.
The U.S. cannabis market is worth about $100 billion right now - but 80% of it is from "black market" sales.
However, as the legal market expands, it'll rapidly grow to satisfy that demand and eat into profits the black market currently enjoys. Sales are already advancing at 40% per year, meaning they should double in 23 months' time.
Compared with that, every other industry seems lackluster. The software industry is up 11.6% over the last year. Or interactive media and services - up 12.4%. Or biotech - growing at 16.4%.
The fact is, no other industry in the United States offers investors the upside you'll find with cannabis stocks.
And this sales growth is just the first of the three drivers I see.
Cannabis Catalyst No. 2: The Cash Hoard
Cash hoards are the "raw material" for deal-making.
And we're already seeing it.
Late in 2020, Subversive Capital Acquisition Corp. - a massive "Cannabis Venture Trust" whose backers include music mogul Jay-Z - bid $500 million to consolidate four companies into what will stand as the biggest cannabis firm in California, and one of the biggest in the industry.
About a week later, Silver Spike Acquisition Corp. bid $1.5 billion for Weedmaps operator and cannabis retailer SaaS provider WM Holding Co. LLC.
We also saw a $130 million move by Schultze Special Purpose Acquisition Corp. to secure its acquisition of Clever Leaves.
This is all just the beginning.
There's another $1.9 billion tucked inside 10 other Cannabis Venture Trusts just like Subversive and Silver Spike that are each seeking investments in the fastest-growing sector on the planet.
Add to that the additional $3.8 billion that cannabis firms raised via secondary offerings and private placements last year - and the estimated $4 billion to $5 billion in cash already sitting on the balance sheets of cannabis firms.
To be clear, this cash flood is just the tip of the iceberg; it's the money we know is directly targeting cannabis deals.
There are billions more being held back by Wall Street and other Big Money players who are biding their time - and waiting for the perfect moment to strike.
Trust me when I tell you that we'll see this soon.
The flashing green "GO" sign will come when we see the New York Stock Exchange and NASDAQ let plant-touching multistate operators (MSOs) list their stocks for trading on these high-profile, massively liquid exchanges.
Indeed, that's spark No. 3...
Cannabis Catalyst No. 3 - Major Exchange Liquidity
A lot of cannabis-expert wannabes will tell you that legalization is the next thing that needs to happen to ignite real growth in this industry.
They're wrong - really wrong, in my view.
The fact the U.S. MSOs can't list on the Big Board or NASDAQ is the primary obstacle holding these players back.
A major-exchange listing by U.S. MSOs will open the figurative floodgates.
Why? It's simple: Big Money wants the reassurance of a highly liquid market to make its move.
They don't have that... just yet.
But once MSOs start to list and the money starts moving, the hard part for you will be letting your gains keep running so you can milk the Big Money bids for all they're worth.
We already see how this plays out.
Back in September, the NYSE demonstrated that it's getting comfortable listing plant-touching companies. That's when the AdvisorShares Pure US Cannabis ETF (NYSEArca: MSOS) - an exchange-traded fund that holds the shares of such firms - first began trading.
Through it, investors have plowed nearly $125 million into the cannabis sector.
Of course, $125 million is just a drop in the bucket.
But once multibillion-dollar companies "uplist" to top U.S. exchanges, billions of dollars will pour in.
The biggest mistake an investor can make right now is to stand by and watch as these catalysts work their magic.
So I'm going to give you a "game plan" that can help get you started, including two stocks to consider buying now - I'll give those to you in just a second.
By joining NICI, you get access to our proprietary database of trade recommendations - which stem from a stock-price-forecasting model that I created just for trading-service members. We tell you what stocks to buy, when to buy them - and which stocks to avoid.
NICI Members also get access to my personal network of industry insiders - a network that includes top executives, financiers, marketers, consultants, analysts, trade-group leaders, and entrepreneurs who I talk with weekly.
We currently have "Buys" on more than a dozen top cannabis companies - many of which can be scooped up for about $10 or less.
Now, here are those two cannabis stocks I mentioned; I think you're going to like the results...
New Year Cannabis Play No. 1: an Aggressive Growth Plan
Thanks to some recent acquisitions, Curaleaf Holdings Inc. (OTCMKTS: CURLF) is now one of the top cannabis companies in the world.
It's one of my top long-term picks. And it's a way to cash in on a market leader - at the bargain price of about $12.
The Wakefield, Mass.-based Curaleaf operates 96 dispensaries, 23 cultivation sites, and more than 30 processing facilities in 23 states across America, and it serves registered cannabis patients, too. It had more than $419 million in revenue during the first three quarters of 2020. And it's growing that top line at 30% a quarter - an annualized growth rate of 185%.
Curaleaf's buyout of GR Cos. Inc. (better-known as Grassroots), which closed back in July, was a bold move. At the time, it vaulted the firm into the No. 1 spot, launching it past well-known cannabis behemoths like Canopy Growth Corp. (NYSE: CGC) and Aurora Cannabis Inc. (NYSE: ACB).
It did another deal in November, buying Alternative Therapy Group's cultivating and processing operations in Amesbury, Mass.
I love this stock.
I like Curaleaf's targeted aggressiveness. That's why I see it as a stock you want to buy and hold onto for the next few years - even adding to your stake on pullbacks.
It's worth noting that we recommended Curaleaf to Money Morning readers back in mid-September, when it was trading at $6.86. It's now trading at $11.94 - a 74% gain in just three months.
That's the same as getting a 296% gain over the course of 12 months. That underscores the magnitude of the gains you can get from cannabis and shows the power of the NICI forecasting system.
New Year Cannabis Play No. 2: an Up-and-Comer
The second stock is Jushi Holdings Inc. (OTC: JUSHF), an up-and-coming "multi-state operator" (MSO) with a fantastic management team.
Though based in Boca Raton, Fla., Jushi's core market is Pennsylvania, a big state with a valuable cannabis market that I predict will go recreational sometime in the new year.
Jushi has a literal monopoly on cannabis dispensaries in the wealthy Northern Virginia market. And it just opened one of only three dispensaries permitted in Santa Barbara.
The bottom line: Jushi has a prime, defensible position in several cannabis markets.
I mentioned the leadership team. It's the chief reason I'm a fan of the company - and it underscores the value of my personal network: I've talked with Jushi's leaders in person, and remain in close contact, which allows me to refine my financial models in "real time."
So I can say with confidence that Jushi's leaders and backers are extremely shareholder-focused.
The founders invested heavily in Jushi. Insiders own 70% of the company, which is high and exceedingly rare for cannabis companies. What it means is that the folks who run the company are shareholders just like all the other investors - and have plenty of "skin in the game."
The company has made about $200 million in capital investments so far, which is also very constrained relative to many big players - especially the Canadian cannabis operators. Jushi amassed a strong collection of assets - with properties in Pennsylvania, Virginia, California - with only a modest investment outlay.
They are smart investors who didn't overpay for growth; and Jushi's shareholders are about to reap the benefits of this shrewdness.
The stock currently trades over the counter at roughly $4.
But my proprietary financial model tells me we'll be looking at a $40 stock by the end of next year.
That's a 10x return on your money over the next 12 months or so.
Gains of that magnitude are how you start a cannabis fortune.
And other stocks I'm following are showing the potential for 20x or 30x returns - or more.
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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.