I had a terrible head cold - but the message got through.
No, it was more than a message...
It was a revelation.
It was back in June, and I was on the floor of the Fourth Annual Cannabis Business Summit & Expo in Oakland, Calif. My head was fuzzy due to the combo of viral infection and strong cold medicine, but I knew the conversation I was in was important.
I was talking to Chet Billings, CEO of legal cannabis investing company Mentor Capital Inc., and he was trying to explain the importance of compliance in his business. He was talking about cannabis companies' need to follow all state and local business regulations - and to track their compliance.
Billings told me that we're now approaching an era when mergers and acquisitions among marijuana companies are starting to happen. And buyers will only go after smaller firms of the highest quality. If they don't have their compliance in order, he said, those acquirers will keep on trolling for more attractive fish.
The stakes are high, Billings said, and a lot of smaller operators simply don't have experience with government regulation or the manpower to pay it the attention it needs without tech software to do the heavy lifting.
I must have still looked confused, because then he put it to me in a way that I, as a lifelong movie fan, could understand: "It's like in the 1980s and '90s when video rental shops still proliferated the landscape."
Eventually, Billings recalled, Blockbuster came along and bought up the best video stores in each town. Hollywood Video picked up the second-best ones. And the dustiest, most unfriendly places got left alone - and went out of business.
"Why would you want a ratty, local dispensary that resembles an old video store?" Billings said. "One false key stroke is a permanent violation. You get enough of those noncompliance violations - and you lose your license... and any chance at being a success."
A-ha!
That's one of the reasons why I've frequently recommended Microsoft Corp. (Nasdaq: MSFT) as a "starter" pot stock. The tech giant has made a big commitment to developing legal marijuana compliance software tools for governments and businesses.
And it's really just one of the many "lessons" I've learned while out on the trail this year that I've used to make some of my members a mint through investing in the right marijuana stocks.
Now I'm using those same lessons to bring you these five pot stock predictions for 2018. All five are catalysts that will really drive the marijuana market upward in the next year.
Don't miss them...
2018: The Year of Legal Cannabis Profits
As of Dec. 19, my Nova-X Report members have racked up 10 double-digit winners and 14 triple-digit winners through legal marijuana stocks I've shown them.
Since I first introduced them, some of these stocks have soared 287.18%... 414.81%... and 653.42%. One even saw peak gains of 1,588%.
So it's no wonder so many of you keep asking me about the best ways to invest in pot stocks. If you want to join those Nova-X members, just click here.
Moreover, despite the ongoing federal ban on cannabis, the general public's opinion is changing fast.
According to an October Gallup poll, 64% of all Americans - and more than half of all Republicans - support marijuana legalization. That support was clear in 2016, as residents of California, Nevada, Maine, and Massachusetts all voted to legalize recreational marijuana use.
Currently, 29 states and Washington, D.C., have legalized medical cannabis, and recreational marijuana is legal in seven states (and D.C.).
That means long-term investors who know cannabis is more than just a fad will capture the biggest profits.
I've got five big predictions - five big catalysts - that will help get them there.
Here they are...
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2018 Cannabis Catalyst No. 5: M&A Is the Future of Legal Marijuana
As Mentor CEO Chet Billings told me in Oakland, mergers and acquisitions among marijuana companies are coming.
And we saw just that at the end of October.
That's when Fortune 500 alcohol producer Constellation Brands Inc. (NYSE: STZ) announced that it is investing $191 million into Canopy Growth Corp. (OTCMKTS: TWMJF), the world's largest publicly traded legal marijuana company. With that $191 million investment, Constellation is getting a 9.9% stake in the Canadian company.
If you don't know Constellation by name, you know its products. It's responsible for Corona beer, Robert Mondavi wines, Svedka vodka, and dozens of other brands.
Now, the mainstream financial press at first focused on the fact that Constellation wants to flavor some of its beers with cannabis.
That may be true, but it's not why Constellation is investing in Canopy. Here's the thing: The big alcohol companies and the big cigarette companies want to eventually swallow the entire legal marijuana industry.
And that will make huge fortunes for the shareholders of the companies they acquire. Here's proof: Canopy's shares have soared 35% since the news.
The announcement came as a surprise to some people because alcohol and cigarette companies have been funding opposition to legal marijuana in each state where the issue has come up. But all those lobbying dollars are just a delaying tactic. These companies know that legal cannabis for both medical and recreational use is coming.
And with their experience in dealing with intoxicating substances and extensive legal regulation, alcohol and cigarette companies are the best positioned to profit from all that legal marijuana.
Big business will eventually control this huge industry.
Now, no alcohol or cigarette company is going to buy a U.S. grower or producer any time soon - the risk is too high while marijuana remains illegal on the federal level.
But we will see more transactions with Canadian growers over time. And I'm lining up my members now so that they profit when that happens.
2018 Cannabis Catalyst No. 4: The Great Green North
Earlier this year, Canadian Prime Minister Justin Trudeau fulfilled a campaign promise to put forth a bill legalizing recreational marijuana throughout the entire country. The bill passed Canada's Parliament and was given royal assent by the Governor General.
This cleared the way for July 2018, when the legal weed becomes, effectively, the law of the land, and Canada joins Uruguay as the only other country on the planet with total legalization.
This has already acted like nothing less than rocket fuel for three of the micro-cap Canadian weed plays we've picked up "on the cheap." They're up 161%, 82.9%, and 306.6%.
What's more, Canada's success with legal weed will serve as a model for other countries' pot plans, especially in Europe - and in several states here at home.
Don't believe the doubters. Full legalization in Canada - come July 2018 - will reignite pot stocks that hail from north of the border.
2018 Cannabis Catalyst No. 3: FDA Approval
I believe the U.S. Food and Drug Administration will approve the cannabis-based epilepsy drug Epidiolex from GW Pharmaceuticals Plc. (Nasdaq: GWPH) by the end of summer 2018.
This will boost not just GW Pharma, but all of my cannabis biotech picks. There's nothing like an FDA approval of a new drug. It validates the research. It will boost the stock. And it will make us confident that other cannabis-based treatments will receive the same approval.
We were early to pick up on the extreme profit potential of GW Pharma, the world's first cannabis biotech. This firm had the United Kingdom's first-ever license to grow pot for medical research purposes, and that "first-mover" status has paid off.
GW marketed the first cannabis-based medicine on the market, Sativex... and the rest is history. The company, previously traded only in London, listed shares on the American Nasdaq exchange and paid folks who got in early quadruple-digit peak gains.
I'm expecting lightning to strike twice with GW Pharma, once Epidiolex is cleared for use in the United States. There's nothing quite like an FDA approval to ignite a biotech stock.
GW Pharma released updated trial results last month, showing that Epidiolex helps patients with rare epilepsy on its own, and that treatment results may improve with long-term use. That caused GW shares to jump 15.3% in November - and it makes me think the FDA will approve Epidiolex soon.
Once that happens, my confidence in the future of other cannabis-based treatments from other pharma companies will rise - and so will those companies' share prices.
2018 Cannabis Catalyst No. 2: Crypto Cannabis Goes Mainstream
I'm predicting that we'll see a major convergence of cryptocurrencies and legal cannabis in 2018.
We're just starting to see the first glimmers of this happening now.
Some crypto companies are already focusing their efforts on cannabis. Paragon Coin - a venture of a former Miss Iowa Jessica and a hip-hop musician - is trying to build a blockchain-based "ecosystem" for the weed industry.
Let me be clear: Many of these ventures will fail... and some will take millions of hoodwinked investors' dollars along down the tubes for the ride.
However, the floodgates are open and the idea is out there.
I'm confident that sometime in the next year, we'll see a "convergence" of crypto and cannabis worth jumping on.
2018 Cannabis Catalyst No. 1: Full Legalization in California Will Be Earth-Shattering
There's no other way to put this. California's full legalization on Jan. 1, 2018, will be the biggest investment catalyst in the history of legal cannabis.
The medical cannabis market in California, the world's sixth-largest economy if looked at on its own, already accounts about half of the total U.S. legal weed market. The day when recreational weed becomes legal, too, will be a truly dynamic event.
That will create an immediate $7 billion annual windfall for the state's legal marijuana business.
In fact, the state's Bureau of Cannabis Control just issued 20 temporary licenses on Dec. 14.
While that may not sound like much, we're still in the early stages of what some are calling the "California Green Rush." These 20 licenses are just a fraction of the thousands of licenses expected to be issued over the next year.
You Can Make Millions Thanks to California's Cannabis Explosion
$20.2 billion… that's the amount of money expected to pour into California's cannabis market in just the first year the state goes fully legal. Mark my words: The savvy investors who know how to get in on the ground floor could see a small stake turn into a million-dollar windfall.
We've narrowed down the pool to three tiny California cannabis companies expected to deliver once-in-a-lifetime fortunes. But once these small stocks go from $1 to $10, to $20, or more… you may never see a chance like this again.
Everything you need to get started is right here.
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The post 5 Bold Legal Cannabis Predictions That You Can Cash In On in 2018 appeared first on Strategic Tech Investor.
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.