Recently, Oklahoma became the 30th state to allow cannabis use in a limited capacity. However, the world is turning its attention to Canada this fall in terms of marijuana legalization. In October, the G7 nation to the north of the United States is set to legalize marijuana in all forms and in all provinces. The news of this event is causing a frenzy among investors. In 2017, legal marijuana sales were upward of $6 billion in the United States. Investing expert and Banyan Hill Publishing editor Matt Badiali recently said that the sector may see enormous gains soon.
But Badiali isn’t alone in his prediction, and it’s not based on some gut instinct or feeling. In fact, studies around the country show that the marijuana market is set to explode in the coming years as the drug gains wider legality, increased cultural acceptance, and wider use in both recreational and medicinal applications. The benefits of marijuana use have already become well-known around the world, and as cultural stigma begins to fall away and federal support for legalization begins to grow, the industry is going to take off. Badiali recommends being on this plane when it begins to take flight, rather than trying to attach yourself once it’s far too late.
Why Investors Listen To Matt Badiali
Matt Badiali earned an undergraduate degree at Penn State University and a master’s degree in geology from Florida Atlantic University. He spent years traveling to foreign locations such as Singapore, Haiti, Switzerland, Papua New Guinea and many other places. As a hands-on learner and worker, he went to oil fields to check on workers and operations. He learned about unique local problems, politics and other important factors. After a while, he developed a passion for investing. It was during his travels that he developed one of his signature approaches to investing—getting hands-on in order to build a real and deep understanding of new industries and potential investments. Badiali likes to get his hands dirty, exploring oil wells and precious metal mines in order to learn about certain industries from the ground-up. That’s what’s made him such a successful investor, and why his investment advice has earned him thousands of subscribers and followers around the country.
Matt found that his determination and his meticulous research methods made him an excellent adviser for earth metals and other natural resources. In the past, he recommended some specific base metal stocks that helped his followers make astounding profits. For about the past decade, Matt has been helping average people learn to invest smarter in natural resources. When he makes a suggestion, Matt researches everything that has to do with a specific industry or category. For example, he once recommended that his readers invest in the metals for lithium-ion batteries. He saw this opportunity because he paid attention to the growing trend of using lithium-ion batteries in electric cars, which are becoming more popular every year.
And so what did Badiali do? He went and spoke directly to executives in the lithium battery industry. He became an expert of sorts on the limits and potential of lithium batteries, as well as where the technology needs to go in order to become a widespread and viable solution in electric vehicles. Meanwhile, he took the time to explore other opportunities for lithium batteries to power the world. He believes that in a few years, towns and even cities powered entirely by low-waste lithium batteries will no longer be just a pipe dream, but within our grasp.
What Investors Are Saying About The Canadian Marijuana Investing Frenzy
In an article that he published on Banyan Hill, Matt Badiali said that he was not alone in his prediction of an upcoming investing boom in marijuana. Another trader and investor in Miami recently said that marijuana will be for Canada what Silicon Valley is for the United States. However, Matt pointed out the frauds and failures of the marijuana space, and he mentioned that Americans cannot invest in Canadian stocks. There are many small cannabis companies in the Canadian stock market. In the last boom, gold mining companies were the hottest tickets. One example was Newstrike Resources, which ran through its cash during the mining bear market without success. Some of the gold mining companies from the last boom have completely changed themselves to take advantage of the upcoming marijuana boom.
Many of these companies recognize that when it comes to burgeoning industries, it’s adapt or die. They recognize that what’s worked for them in the past isn’t always going to work in the future, especially as the world changes and grows around them. As a result, they have continued to find new ways to make progress and take advantage of emerging opportunities. That gives them the power to keep going and gaining new investors, even when they adapt their offering or expand it into entirely new sectors and areas of service or products.
Newstrike is a prime example. When it learned about the new trend, it went through a reverse merger process and switched to marijuana instead of gold mining. A popular musical group in Canada became a big supporter of Newstrike, which added to its power. In 2016, its shares were under $.05 in Canadian currency, and those values shot up to over $3 after the hype started. That gain reflected an astounding increase of 5,900 percent. However, shares dropped back down to $.50 recently.
But the lesson here is just how quickly, and how dramatically, interest in an emerging industry like marijuana can soar. All it takes is a small set of factors—a celebrity endorsement, a federal change in legislation—and overnight, stocks can soar. That’s why getting into investing in the marijuana sector now is so vital. It’s impossible to predict when legalization efforts will kick in on the federal level, or a major player will emerge who nails every element of the product, marketing, and brand voice to become a superstar in the industry.
Growth Of The Marijuana Sector
Although Newstrike achieved notable success, not all mining companies will do the same. They do not have popular rock bands supporting them. Matt Badiali said that the risk is high in Canada’s marijuana sector. He referenced an American news article, which stated that more than 30 failed companies switched to the marijuana sector recently. The majority of those companies are now marijuana growers rather than dispensaries. Matt compared the market for growing marijuana to the market for craft beer. When cannabis is legalized completely, some alcohol and tobacco companies will become more active. As they gain an interest in the sector and become competitors, the prices will start to decrease.
Does that mean big-name alcohol companies will begin to sell cannabis and marijuana products? It might. If they see the writing on the wall and recognize that it may be their opportunity to stay relevant in a crowded market, they could jump into the games themselves. That also means that those who hold stock in alcohol companies might be convinced to hold on to those stocks, as the adapting industry may lead to innovation and greater profits in the long-term. It may be slow-going at first, but no one can expect the massive alcohol industry to go out without a fight.
Badiali encourages those who read his newsletters and all those with whom he comes in contact to begin looking into the power of marijuana corporations and industries as an investment opportunity. As the nation currently stands, nearly 40 states have already made marijuana legal and regulated, whether that applies to medical uses or recreational use designed for basic enjoyment. While marijuana has not yet been universally legalized as a whole by the federal government, it’s anticipated that it soon will pass in the United States—making marijuana widely available around the country. This will also provide huge opportunities for those willing to make smart investments early on in the process.
But what exactly are the uses of marijuana, and why is it expected to become such an enormous industry? Part of the reason marijuana is not already universally legal in the United States is that there is still a lingering stigma surrounding the time when it was considered a “gateway drug,” highly addictive and the realm of stoners and drug dealers. But times have changed. As more and more scientific research has emerged about CBD and THC, the two main chemicals found in marijuana, findings have shown a wide range of benefits and far fewer risks than was ever anticipated.
For example, CBD oil has been shown to have a massively positive effect on a few forms of epilepsy, and has even been used to help children have less seizures and live more normal, fulfilling lives. There is also some medical research that suggests CBD oil can be a powerful tool for treating issues like anxiety, social anxiety, mild depression, and joint pain or arthritis. Studies are still fairly thin in some respects, but more and more are being released every day, and each one adds to the growing evidence that CBD oil and medical marijuana offer a wide range of benefits.
But what about recreational marijuana use? All financial and economic information points to recreational marijuana use exploding in popularity over the next decade, particularly as the social stigma surrounding it begins to fade. While some might wonder whether marijuana will ever replace alcohol as the social legal drug of choice, others like Badiali recognize that the writing is already on the wall. Not only have alcohol sales measurably decreased in areas where marijuana has been legalized, but marijuana also carries a wide range of benefits compared to alcohol. Studies show that it’s much less addictive, less dangerous, and less unhealthy for the body. A beer is essentially an alcoholic loaf of bread as far as carbs are concerned, while marijuana offers no ill-effects to weight as far as any studies have shown.
Want more proof? Research has shown that sales of alcoholic beverages has decreased as much as 15 percent in areas where marijuana has become legalized. This is the finding of a decade-long study that followed areas’ sales of alcohol, particularly beer and wine, before and after marijuana was legalized in those areas. Additionally, 2017 saw breweries in the United States experiencing their worse years of sale in history. During that year, they shipped nearly 4 million barrels less than they did in 2016.
Does that mean people are going to suddenly stop drinking wine and beer? Not at all. But it does show that in certain situations, marijuana has already begun to serve as a substitute for drinking in areas where marijuana is readily available.
That means that relying on alcohol companies for investments isn’t going to be the surefire bet that it once was. These companies will adapt, as they always have, which may provide opportunities for those who can weather the storm of a new industry challenging them. But in the short-term, investing early and often when it comes to the marijuana will provide massive returns—as long as you can get in before big money gets involved.
The more deregulation occurs surrounding the marijuana industry, the more large companies are going to want to put their hands in the pot. And the more this big money gets involved, the less return will be available to you for your hard-earned investment. The major tipping point will likely be whenever the federal government universally makes marijuana legal throughout the 50 states. This is not so much an issue of if, but when. Experts all agree that the day is coming, and Matt Badiali reminds his readers that they won’t want to be kicking themselves and wishing they’d invested when they had the chance.
Another factor at play is a cultural shift being brought about by the millennial generation, who are much more comfortable with marijuana use than any generation before. Many have even been using marijuana illegally already, so the legalization will only make their products more accessible than before. Marijuana aside, millennials have been shown to drink alcohol at a lower rate than many previous generations of the same age, and the amount of people who drink alcohol on a daily basis in college was cut in half from 2016 to 2017.
Meanwhile, the marijuana industry is already booming. It generated more than $6 billion in 2016, and many market experts have anticipated that one decade from now we’ll have seen the marijuana market grow seven times larger than it is now. With the potential for a $40 billion or more market being generated in less than ten years, just imagine the possibilities as an early investor who is able to get in early on in the development of this new industry.
Matt Badiali’s ETF Recommendations
For investors who are in the United States, Matt recommended some ETFs that are in the marijuana sector. One example is ETFMG Alternative Harvest, which has assets that total $380 million. The Marijuana Stock Alternative Harvest invests money in Canadian businesses. Another option for American investors is the AdvisorShares Vice ETF. The Green Organic Dutchman Holdings is its largest grower at 7.5 percent. Its focus is on marijuana, tobacco and alcohol. The entire sector will see benefits after Canada legalizes marijuana, and some alcohol and tobacco companies are already preparing to compete. For example, Constellation Brands and Altria have already invested in marijuana growers. And that’s just the beginning. Every day, more and more companies are jumping into the marijuana investing game, providing chances for investors to get involved early.
As Matt Badiali concluded in his advice letter, he encouraged readers to learn more about the marijuana sector before legalization takes place. By the time it happens, they will have sufficient knowledge to make informed decisions. Research is key in all investing, despite the culturally ingrained idea that many investors shoot from the hip and use their gut instincts. But those instincts are developed from experience and research, and that’s what experts recommend for their readers. However, it is optimal to follow the advice of a professional such as Matt Badiali. He shares valuable insight, research and tips with his paid subscribers.
Matt plans to continue monitoring the marijuana sector in Canada. One risk that every investor should watch for is the effect of the black market. Each country has its own unique structure on many levels. However, California’s sales of legal recreational marijuana were disappointing after the state legalized cannabis in the past. The reason for that was because of how easy and inexpensive it was to get on the black market. Many people were already using it, and some people were more comfortable buying marijuana the same way as they had been before it became legal. California is closer to Mexico and has a massive amount of marijuana coming over the Southern border. To learn more about the Canadian marijuana sector as legalization unfolds and as statistics become available, investors can follow Matt Badiali’s updates on Banyan Hill or his newsletters. He authors two newsletters called Front Line Profits and Real Wealth Strategist.
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