It feels like we’ve been saying forever that we’re ready for some serious growth in the U.S. cannabis market. When Democrat Joe Biden took the Oval Office, it was a boom heard throughout the sector.
Then there was the Georgia Senate run-off, and the Democrats got even more power. Then, in February, pot stocks plummeted.
Now, we think it’s time for a rebound.
This morning, while browsing the web, something caught our attention: an article about U.S. pot producers was the lead story on Barron’s site.
That’s right. Marijuana is back in the mainstream.
Midas Letter readers might remember an interview from March where we compared the growth in the U.S. cannabis market — which happens to be the largest in the world — to a more mature, but flattening Canadian one.
In that interview, we noted that the top five Canadian cannabis stocks reported $0 profitability. The top five U.S. names, on the other hand, forecasted $1.5 billion for 2021.
Per Barron’s, many investors have heard of the top Canadian cannabis companies — Canopy Growth, Tilray, Aphria — because they’re listed on the Nasdaq.
But we’re still waiting on the federalization of marijuana. The top U.S. companies have licenses to operate in states that have legalized. But until the federal government legalizes cannabis, these companies with huge market caps will be stuck trading over the counter.
One important change could be on the horizon.
Also from the Barron’s article, “On April 19, the House of Representatives passed a bill by a 3-to-1 margin that would allow the pot industry to use the federally regulated banking system. Senate Democratic leaders support a matching bank bill.”
There appear to be some Republicans on board with this as well.
The passing of that bill could be a huge step forward for the U.S. cannabis market, and that means there’s a couple of diversified “Multi-State Operators” (MSO’s) to watch over the next few months…
In our service, the James West Letter, there are multiple cannabis companies that could benefit from this possibility.
On top of that, demand for medicinal cannabis in the country is incredible.
For instance, recently released data from Pennsylvania showed sales topped $100 million for March, and $904 billion over the prior 12 months.
And that’s just for medicinal usage. Could you imagine what the charts would look like if marijuana were recreationally legal?
What’s more, what would the big-name stocks look like?
One of the more notable ones in the James West Letter portfolio is Curaleaf Holdings Inc. (OTCMKTS: CURLF). As the country keeps inching closer to legalizing cannabis at a federal level and demand goes up, this company did one of the smartest things it could do.
It snatched up every state license it could get its metaphorical hands on, now controlling over 10% of retail locations in both Pennsylvania and Florida.
And this is just the beginning. There’s some serious growth in the U.S. cannabis market on the horizon, and investors should consider keeping close tabs on it.
All the best,
The WealthPress Team
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