Marijuana Stocks Stand to Gain From Increased Acceptance
We make a lot of our living here at InvestorPlace.com writing about stocks and themes we know folks are searching for in Google.
Terms such as "hot stocks to buy now," and "dividend stocks" and "should I buy (ticker) stock" are all subjects we write about because they are frequently typed into Google's search bar.
One of the cool things about the Google search platform is the autocomplete. That refers to Google's function to complete your search for you once you start typing.
So, if you type "flights to ..." Google offers to complete the search with the most popular terms. As you type in "flights to" the terms "flights to Miami," or "flights to Orlando" start to appear to "auto-complete" your search.
As an experiment I decided to type in "CBD for ..."
The results are fascinating ....
CBD is finding more mainstream acceptance every day.
Just in case you are not a regular Digest reader, CBD is shorthand for cannabidiol, which is one of more than 400 chemical compounds found in a cannabis plant. Of those 400, over 60 are unique to the cannabis plant, and they are referred to as cannabinoids.
Most people think of the commercial possibilities associated with recreational marijuana, but the many uses of CBD are often overlooked.
CBD does not get you "high" because it is the non-psychoactive compound from cannabis and hemp.
When you type "CBD for ..." in Google's search bar, here is what autocomplete provides ...
People are using CBD increasingly for their pets as well as their own physical and mental wellness.
Matt McCall is the InvestorPlace marijuana expert, who is helping his Investment Opportunities subscribers get the most out of this investing trend. Here is how he described the benefits of CBD last fall.
I could write an entire book on the benefits of CBD, but I'm going to keep it simple for you. It's actually been used by wellness and medical professionals for years as an alternative to traditional pharmaceuticals to treat everything from anxiety and depression to chronic pain to the reduction of inflammation to childhood epilepsy. If it were a drug, we would call it a wonder drug. CBD is considered one of the most beneficial compounds available to humans, and it does not have the nasty side effects that many drugs do.
The Federal government is taking action to make CBD more widely available.
The passage of the Farm Bill late last year legalized growing hemp in the United States and has been a major catalyst for the CBD market. Earlier this week, I wrote about CVS and Barneys New York selling CBD products. Thursday Walgreens announced it would sell CBD creams, patches and sprays in 1,500 of is stores, far outpacing the handful of CVS stores that will carry CBD products.
The CBD market is taking off, even as there is still some uncertainty about how the government will regulate it. FDA Commissioner Scott Gottlieb was specifically pressed on this issue Thursday at a Senate Appropriations hearing. Committee Chairman Patrick Leahy reportedly asked how the agency would use its enforcement discretion as the regulatory process moves forward.
Gottlieb has said several times that regulating CBD products is complicated and that Congress should act independently if they want the process to move faster, adding that the agency doesn't have a clear route to allow CBD to be lawfully marketed without developing new regulations.
One Congressional Committee has already helped.
The House Financial Services Committee passed a bill that would increase marijuana businesses access to banks. Banks' reluctance to engage with marijuana companies has been a major obstacle to market growth.
Because marijuana is illegal at the federal level, banks are reluctant to allow marijuana businesses to use their services out of fear of violating federal money laundering and drug laws. As a result, marijuana companies are all-cash operations, even in states where the drug is legal.
The Secure and Fair Enforcement (SAFE) Banking Act is meant to reassure banks that providing their services to cannabis businesses will not result in federal prosecution under existing money laundering or drug laws. The bill passed committee by a 45-15 vote, but no full House floor vote has yet been schedule.
Previously, a lot of marijuana legalization activity stalled at this point because the former House Rules Committee Chairman, Republican Pete Sessions of Texas, was a major opponent. However, he lost his seat in the last election, and the new Democratic Chairman is much more sympathetic.
In fact, the House may simply vote to legalize marijuana very soon.
In a recent radio interview, House Rules Committee Chairman James McGovern (D-MA) said that he expects the chamber to vote to end federal marijuana prohibition within a matter of "weeks."
"We will guide it to the House floor for a vote, which I think it will pass with an overwhelming vote -- Democrats and I think a lot of Republicans as well," McGovern said. "If we have a strong bipartisan vote that will increase the pressure on the Senate to do something."
Celebrities are getting into the act. Actor Seth Rogan, known for Knocked Up and Pineapple Express, is starting his own marijuana company, called Houseplant. According to the news reports, the company is seeking not only to sell marijuana but to help educate users on the different strains and how to use them.
And though many marijuana businesses are small, or startups like Rogan's, at least one is big enough for an S&P Index.
We've reported on the great market performance of Innovative Industrial Properties Inc (IIPR), the marijuana REIT. Investors should remember that it was only about six weeks ago that IIPR was the first marijuana stock added to the S&P 600 Small Cap Index.
The S&P Small Cap 600 Index tracks small companies that meet specific criteria for inclusion. The rules require the unadjusted market cap to be between $450 million and $2.1 billion, reasonable liquidity, more than 50% of the shares outstanding available for trading and financial viability, which is defined as positive earnings in the most recent quarter as well as over the past year.
The momentum in the cannabis market is staggering. Whether for recreation, or health and wellness, cannabis is gaining acceptance -- every day.
As nascent marijuana businesses grow larger and inevitably qualify for major indexes, the positive market opportunities will only accelerate - and certain stocks will experience meteoric jumps. Matt McCall has made some great marijuana stock calls already, and he is releasing his next IPO pick next Thursday to his Investment Opportunities subscribers. For more information on how to get all his picks, just click here.
By the way, if you want to see more of Google's autocomplete in action, check out this YouTube video of Seth Rogan and Rose Byrne answering the Web's more searched questions.
To a richer life ...
Luis Hernandez, Managing Editor
and the research team at InvestorPlace.com
P.S. Mark your calendar for Tuesday, April 4
I don't know what you have planned for this day right now ...
But whatever you're doing, I suggest you rearrange your schedule, because you've got the chance to make a heck of a lot of money, beginning on this exact day.
All thanks to the red-hot cannabis industry ...
Even if you don't know a thing about the marijuana markets ...
Even if you've never bought a stock before ...
If you have a just small amount of cash, you could multiply your money many times over beginning next week. What's going on exactly and how can you cash in?
Click here for Matt McCall's exclusive presentation that tells you the full story.
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