Justin’s note: As Dispatch readers know, marijuana legalization is starting to sweep the globe. And it’s providing everyday investors with the investment opportunity of a lifetime.
Recently, Doug Casey and International Man editor Nick Giambruno sat down to discuss how marijuana legalization would benefit not only investors… but society as a whole.
Nick Giambruno: Doug, I think cannabis will become a mainstream big business over the next few years. Legitimate companies are already working to commercialize this useful plant in various ways. What’s your take?
Doug Casey: I completely agree. Pot has been proven to have huge medical applications. I think there’s going to be a big recreational market too, at least the size of that for alcohol. And industrial applications for hemp, as a substitute for cotton in fabrics and wood pulp in paper, are gigantic. In fact, these applications will eventually dwarf other uses for hemp.
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Nick Giambruno: Have you invested in the space?
Doug Casey: So far I’ve invested in two private cannabis companies that are going to go public.
I bought 500,000 shares of one, a couple of years ago, at a dime per share. I rarely put money in private start-ups—70% of the time they go to zero. In its last round, however, this company privately raised money at $2.25 per share. It looks like they’re going to bring it public at around $4, and if the market’s hot it will go to $10. Potentially a big hit. It has the potential to be a 100-bagger. You need one of those occasionally to compensate for the inevitable losses of putting money in private companies where you’re a minority shareholder.
At that point, I’ll have to figure out whether it’s a real business or just a fortunate speculation. But the big gains in cannabis stocks are still ahead of us. Most of the public companies are still far too small for institutional investors. The big money has yet to participate.
Nick Giambruno: That’s just a taste of the profit potential in this space. Of course, all of these lucrative profits used to be underground.
Doug Casey: I have a number of friends from the 60’s and 70’s who made it big in the pot, coke, and psychedelic trade. The penalties were minimal in those days, the narcs were few and inexperienced, and competition was light. Hippy entrepreneurs of the day tended to get into either drugs or computers.
Nick Giambruno: Medical marijuana has already been approved in 29 states (plus Washington, DC). And eight states (plus DC) have approved recreational use.
Recreational marijuana is legal in Colorado, where you live part of the year, Doug. What have you seen?
Doug Casey: I live in Aspen during the northern summer. The little town has at least five pot shops. They’re all coining money. Their big problem is the banks won’t accept their cash deposits, for fear of getting crosswise with the feds.
From what I can tell in Colorado there’s much less abuse than there was in the old days. I also spend a lot of time in Uruguay where it’s legal, and Canada where it’s practically legal. Legalization has—perhaps counterintuitively, and surprisingly to many—radically reduced abuse in those jurisdictions as well. Legalization makes sense in every way, and the trend is going to spread worldwide.
Nick Giambruno: The US government still classifies marijuana as a Schedule 1 drug. In other words, the feds consider marijuana as dangerous as cocaine or meth.
That’s completely absurd.
The good news is this ridiculous policy probably won’t last much longer. States are too hungry for the tax money.
Bankrupt states like Illinois are desperate for every penny they can extract from the milk cows that live in their fields.
The economic benefits of legalization are simply too good to pass up.
Of course, many people worry the Trump administration will shut down the industry. And there’s good reason to be nervous.
I’m sure you remember when Trump’s attorney general infamously called marijuana “slightly less awful” than heroin.
Comments like this have kept a lot of people from investing in marijuana.
What’s your take?
Doug Casey: Well, let me preface this by saying Sessions was a disastrous choice for Attorney General. He’s done nothing in his life but act as a prosecutor, and a politician. He has no experience—and therefore probably no inclination or even ability—to produce things of tangible value.
But we almost always get undesirables as the AG. They’re hatchet men, meant to prosecute “the enemy,” taking their pick of the hundreds of thousands of laws and regulations on the books to do so. Look at some of the recent AGs—Loretta Lynch, Eric Holder, Alberto Gonzales, John Ashcroft, Janet Reno. All of them would have been willing and obedient lapdogs to Stalin or Beria. A certain personality type is suited for the job.
Sessions is a rabid drug warrior, even against something as useful and benign as hemp, or marijuana. He’s a busybody who feels no guilt or remorse at enforcing laws that have destroyed the lives of tens of millions. I don’t know if he’s stupid, bent, thoughtless, paranoid or what his problem might be. Maybe he’s afraid that if pot wasn’t illegal he’d become a dope fiend himself. But the proper direction, the objective, is to legalize all drugs. Not amp the drug war up another notch, as he wants to do.
Nick Giambruno: Fortunately, we can make money in the industry no matter what the US government does.
Right now, the best way is to invest in Canada. It’s at the forefront of the legal marijuana market.
What about publicly traded companies that we can access in our brokerage accounts?
Doug Casey: There are dozens of marijuana companies out there already. A bunch more will come public. The marijuana market is going to get hot—notwithstanding my bearishness on the economy and stocks in general.
Nick’s note: I encourage you to watch this brand-new presentation that my team and I put together. As you read today, even Doug Casey is getting in on the “green gold rush.” He’s already made a million bucks betting on a little-known marijuana company.
But this is only the beginning. This new pot boom is set to be seven times bigger than the first pot mania—and it will kick off on October 31, when a new law passes. Here’s the whole story…
Must be nice to live in a high-end town like Aspen where if a bum shows up the cops deliver him to Denver. I live in Colorado too. Here’s what I’ve seen: within a few weeks of legalization hordes of bums with their dogs, usually pit bulls, descended on the state. Downtown Denver is a place many avoid now. The bums shit in the alleys and harass people. I’m all for medical marijuana for people with chronic or terminal illness, but not recreational. People are screwed up enough as it is, they need to get off the anesthetics they are already on.
Legalizing reefer in CO was the straw that broke my back. After watching this great state go from solid conservative to being controlled by the fucking REressives in Denver and Boulder plus Hickenlooper, possibly one of the most far left govs in the US, I said fuck this and moved to w Texas.
This asshole thinks it’s benign? Sorry bub but this shit ain’t your dad’s reefer. It’s multiples of times stronger. Plus it’s being made into edibles so you can be stoned all day without the tell tale aroma.
The last place I lived was in Canon City and saw groups of teens and preteens openly smoking reefer,on their way to school, walking in groups down the street and that was clearly prohibited yet the cops had just said fuck it.
I tried several hires there for my studio but these folks were chronically late or just plain didn’t even show, were fucked up when they did show and generally had a bad ‘tude.
This pot is strong and heavily ingesting it in your teens is brain damaging. Besides attracting hordes of pot smoking bums, we’re turning this generation into true mind numbed zombies.
Yeah, there’s a place for MM and decriminalization was the route to take but legalizing it was an idiotic move. If you think anything that Soros does is bad for our culture, traditions and history then ask yourself WhyTF he funded so mnay efforts to legalize it?
yeah
The ratio of THC:CBD has increased radically in many modern strains. Strains with a high THC:CBD ratio induce psychosis in many users, sometimes causing permanent damage. This may not be sufficient reason to ban, but it’s true nevertheless.
An old saying when I was a kid: “pot will get you through times of no money better than money will get you through times of no pot”.
While it may be fun for some, it also deadens any drive to accomplish anything; in other words the perfect drug for this generation of stay in mom’s basement and troll the internet young people. If you were fearful of what this country is coming to, just wait to see what the next generation looks like after easily accessible pot becomes the NORML.
I don’t think that nationwide legalization will be a good thing. I’d still prefer decriminalization. I’ve had numerous opportunities to invest in local weed related businesses here in WA state but my concern is that the feds might declare my gains to be profits from an illegal drug trade. I don’t need that kind of uncertainty or hassle. I would like to finance a couple of grow operations for entrepreneurs if they can sort out the federal side of things.