When Napoleon ruled France in the early 1800s, California was a wild frontier region – home to just a handful of pioneers.
But last year, California overtook once-mighty France in the rankings of the world's largest economies, coming in at sixth place.
The International Monetary Fund says California's GDP is worth roughly $2.5 trillion, buoyed by agriculture, tourism, aerospace, and, of course, Silicon Valley and high tech.
The vast scale of economic opportunity in the Golden State is incredibly important for another big reason. That huge GDP will help serve as a key "trigger" – or catalyst – in the breakout frontier investing world of legal cannabis.
Starting Jan. 2, California is all set to make recreational use of marijuana for adults fully legal. Simply stated, we've never seen anything this big happen in the legal cannabis industry.
That's why I'm headed south to Anaheim this week to attend the California Cannabis Business Conference, where some 350 firms will be represented.
To give you the inside edge, I've spoken with the group's leaders.
Today I'll be sharing their insights with you.
They foresee a more than $20 billion impact in just the next four years alone.
That's why I'll also show you the single best move you can make to get a slice of that huge pie…
Bringing Their "A" Game
"All eyes are on California, and for good reason," Josh Drayton, communications and outreach director for California Cannabis Industry Association (CCIA), tells me. "We've never seen a rollout this large."
Drayton's comments come as a wide range of analysts predict California will have a dramatic impact on the national industry's sales volume starting in just a few months.
"We're now seeing insurance providers coming into this space, tech companies, commercial real estate… folks who never anticipated they would be touching the cannabis industry," he says to me. "But I really do believe, throughout every step that we're dealing with, there is room for growth the whole way through. Now is the time where every part of this industry needs to bring its 'A' game."
A report by the University of California Agricultural Issues Center suggests that medical cannabis already adds $5 billion a year to the state's economy.
That figure could swell much higher as the state becomes a legal and regulated recreational market. Analysts note that right now many growers and millions of buyers in California are working outside the law, depriving the state and its cities of badly needed tax revenue.
As by far the nation's largest consumer market, with nearly 40 million residents, recreational use is bound to help make legal cannabis even more popular that it has become in the last few years.
A poll conducted by CBS News found that 61% of Americans think the time has come for legal recreational pot. That's up five percentage points from a year ago. And it's more than double the 27% approval rate in 1979.
Here's how that's translating into dollars and cents…
A $100 Billion Market by 2029
Legal pot sales rose a stunning 34% in 2016 to $6.7 billion across North America, according to Arcview Market Research. That figure should surpass $8 billion by 2018 and reach $22.6 billion by 2021. That works out to a 27.5% yearly growth rate.
The impact on "jobs, tax money, and wealth creation made possible by California ending marijuana prohibition cannot be overstated," says Arcview CEO Troy Dayton, with whom I recently met.
Dayton says a compound growth rate of more than 20% a year will continue "for many years past 2021 as more states and countries legalize cannabis."
For its part, Ackrell Capital is even more bullish on California's recreational pot market. By 2029, the firm says, the sector will be worth a stunning $100 billion.
But analysts may actually be understating California's full impact, says Kristi Knoblich Palmer. She is a co-founder of cannabis edibles firm Kiva Confections and serves on CCIA's board of directors.
Here's what she has to say…
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.