Wall Street is waking up to the fact that legal cannabis is quickly going mainstream.
After all, a $3.8 billion investment is the kind of move that makes big waves.
Of course, this is something we've been talking about for close to two years. And by being way ahead of the curve, you folks and my Nova-X Report members have had the chance to score some pretty sizzling gains.
Now then, there's no question the Aug. 15 news that Constellation Brands Inc. (NYSE: STZ) is spending close to $4 billion to take a 38% stake in the Canadian cannabis firm Canopy Growth Corp. (Nasdaq: CGC) was a game changer.
Many cannabis stocks have rallied on the news – and I hope you were in on some of that.
But there's an element to the deal that almost no one else is taking about.
You see, I think this mega investment marks the beginning of whole new financial trend.
One that will mean big bucks for cannabis investors.
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Trump's Green Light
Let me show you what I'm talking about…
Despite massive growth in the space and a majority of states making medical marijuana legal, cannabis stocks had been under pressure for several months.
That's largely because in early January, U.S. Attorney General Jeff Sessions sparked a sell-off in the sector. A longtime cannabis critic, Sessions said he retained the right to crack down on states that had made marijuana legal.
Sessions cast doubt on the sector because marijuana remains illegal under federal law – despite the fact that 30 states and the District of Columbia have legalized some form of cannabis use.
Of course, we now know the odds of a federal crackdown are highly unlikely. Even Sessions' boss, U.S. President Donald Trump, supports a bipartisan compromise under which states could make marijuana use legal without interference from the federal government.
Known as the STATES Act, the legislation would allow each state to determine for itself the best approach to marijuana within its borders – without fear of a U.S. Department of Justice crackdown.
Because it draws on states' rights under the 10th Amendment to the U.S. Constitution, the bill has gained approval from conservatives – and the the bill has wide support in both the House and Senate.
While that's a great backdrop for the emerging cannabis sector, there's nothing quite like a multibillion-dollar deal to get investors excited about huge gains ahead.
That's why Constellation's new pact with Canopy is so vital. See, Constellation is the global beverage giant behind Corona beer, Robert Mondavi wines, Svedka vodka, and many other well-known brands.
And it marks the start of the great marijuana sector buyout trend – in which big consumer products companies will spend the next few years acquiring cannabis companies.
But here's why this deal is even more important than it sounds…
About the Author
Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.