When U.S. Attorney General Jeff Sessions rescinded the so-called Cole Memo on Jan. 4 and opened the door for federal prosecutors to target marijuana businesses, plenty of legal cannabis investors panicked.
But not us.
The very next day - despite pot stocks plummeting by double digits - I said the U.S. Department of Justice's unprecedented attack on states' rights is no reason to panic. Instead, I said, it was a massive opportunity for investors.
And I was right.
Since then, most of those stocks have reversed their losses, and advocacy groups, medical marijuana patients, legal pot entrepreneurs, politicians in legalized states, and even members of Congress have stood up to Sessions. They're doing everything they can to reverse or neutralize the AG's anti-marijuana moves.
Now, just in the past few weeks, Sessions has picked up a brand-new "enemy"... from a place few would expect.
Because this man is so powerful, the moves he makes now could shut down Sessions - and help fuel the entire legal marijuana sector.
That's because he sits at the same White House table whenever President Donald Trump's Cabinet meets.
Take a look...
(Marijuana) Money in the Bank
Sessions' "enemy" - and new hero to pot stock investors everywhere - is Treasury Secretary Steve Mnuchin.
In recent weeks, Mnuchin has been vocal about his belief that marijuana companies should be able to store their money in federally insured banks, just like any other company.
"I assure you that we don't want bags of cash," Mnuchin testified earlier this month before the House Financial Services Committee. "We want to make sure that we can collect our necessary taxes and other things in other than cash."
Here's why Mnuchin's statement is so important.
You see, before the Cole Memo, legal marijuana company owners had zero access to banks. They had to deal entirely in cash.
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But the Cole Memo gave banks some leeway to work with legal cannabis firms without fear of being charged with money laundering.
Now that's all up in the air - and marijuana-friendly banks are once again fearing the wrath of the Financial Crimes Enforcement Network (FinCEN), the U.S. Treasury Department agency that fights money laundering and other banking crimes.
Problem is, no one at Justice informed FinCEN about Sessions' Jan. 4 announcement.
It was a total surprise.
And now we're beginning to grasp what Mnuchin thinks about that...
"Prevent the Insanity"
During another House hearing a few days later, this one of the Ways and Means Committee, U.S. Rep. Earl Blumenauer practically begged Mnuchin and his team to put together sensible legal marijuana banking guidelines.
The congressman from Oregon, where recreational marijuana has been legal since October 2015, said it was an issue of public safety... that cash-only businesses face increased dangers of crime and violence.
"There is this air of uncertainty about access to banking services," Blumenauer said to Mnuchin. "The Obama administration issued some guidance to allow banks to open accounts for people who grow, process, and [provide] retail sales of marijuana. But still there are many of them who don't have access to banking services. It is a threat to public safety."
Blumenauer implored Sessions and his House colleagues to "prevent the insanity of having this state-legal activity be forced to be conducted on an all-cash basis."
Mnuchin seems to agree with Blumenauer - and, therefore, pot stock investors.
"I can tell you we're working on it as we speak," the treasury secretary said. It's "at the top of the list."
That's good to hear.
And it's good for any investments you have in legal marijuana.
Here's why...
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The Fed Green-Lights a Marijuana Business
Right now, financial institutions serving the cannabis industry are mostly credit unions and other small, local banks.
But if Mnuchin is able to get banking regulations in order, that would be an extremely positive signal for banks looking to get into the marijuana sector.
And here's another signal we just spotted...
On Feb. 2, the Federal Reserve Bank of Kansas City gave conditional approval to Fourth Corner Credit Union to launch its business catering to cannabis-related companies.
Now, the Federal Reserve did not say the Colorado-based bank could serve companies that "touch the plant." It can only deal with ancillary "pick-and-shovel" companies - like accountants and lighting firms - and advocacy groups.
But this is still a big step forward. In fact, it's the first time the Fed has ever given the go-ahead to a cannabis business.
Add that together with Mnuchin's recent remarks and we see a one-two punch against Sessions' anti-pot moves... from within President Trump's own government.
I'll keep an eye on both of these stories going forward - and bring you the news as soon as I get it.
Meanwhile, they're going to help pot businesses and the ancillary firms that serve them move forward.
And they're going to drive pot stocks' share prices up, up, up...
Where to Go Next
We've put together a "mini-portfolio" of cannabis-related investments over at Strategic Tech Investor: Microsoft Corp. (Nasdaq: MSFT), GW Pharmaceuticals Plc. (Nasdaq ADR: GWPH), and Scotts Miracle-Gro Co. (NYSE: SMG).
But I've put together a whole "ecosystem" of cannabis plays for the paid-up members of my Nova-X Report.
Some of them are making double-, triple-, and even quadruple-digit gains on what I've shown them.
You can find out how to join them by taking a look here.
The post Jeff Sessions' Worst Enemy on Legal Weed Sits at the Same Table 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.