This week, Executive Director Greg Miller answers members’ questions about the legality of paying for CBD products with credit cards, what to do in times of volatility, and how to play the new banking bill. Take a look…
Welcome to another edition of our member Q&A.
It was another exciting week, with a new trade for our Cannabis Insider’s Report members, Walgreens‘ announcement that it will follow CVS in offering CBD products at its stores (I’ll have more on that early next week), and a special House committee approval of a banking bill.
That bill, the SAFE Banking Act, will be the first federal cannabis reform measure to see the House floor, marking a major turning point in American politics. A bill of this magnitude obviously has major implications for the cannabis industry, so I was happy to see our members thinking about how it will impact our investments.
Here’s a question Gus had about the bill…
Gus M. asks: “Do we or have we identified the stocks that have to do with banking? Before the ‘Banking Bill’ is approved?”
Excellent question, Gus. We have identified such a stock – of a sort. I’m not putting pure-play banking stocks in the Cannabis Investor’s Report model portfolio because even the best cannabis banks won’t grow at the rate of pure-play cannabis stocks, but last week I shared the story of Severn Bancorp (Nasdaq: SVBI) with our members.
Severn appears to be the only publicly traded bank taking on cannabis customers in any real way. Looking forward, it’s impossible to predict the winners among banks when the banking bill passes because most banks have not announced their plans. Wells Fargo has said that it will not enter the cannabis banking market even after that banking bill passes – it’s going to wait until full federal legalization. I suspect most of the big national banks will come to the same conclusion.
Regional banks will be the winners here, but I don’t know which ones. I do have a friend who follows the banking industry very closely. I’ve asked him to let me know when there’s a standout, and when that company appears, I’ll share it with you just as I did with Severn Bank. You can read my report on Severn by clicking here.
Of course, banking wasn’t the only news our members had questions about.
Elroy J. wants to know: “How does CVS plan to accept payment from CBD sales? Is it legal to use credit or debit card?”
Thanks for the question, Elroy. While CBD companies may have trouble securing financing from banks, they do not have the problems with deposits that THC-cannabis companies do. CVS can take a credit card payment for its CBD products just as easily as it can for shampoo.
That’s true of other CBD retailers, too. A company called Green Growth Brands (CSE: GGB, OTC: GGBXF) intends to put CBD kiosks in 600 malls across the United States. Every one of them will accept any major credit card.
But let’s turn our eyes to some recent market volatility.
Othman H. says: “I bought cannabis stocks, some of which went down, especially on last Friday. Should I sell some and buy another? I need your guidance. Thank you in advance.”
Othman, I understand your concern – I’ve been there. Holding a stock when the market is falling is among the toughest disciplines an investor can acquire. For long-term investors, it’s also one of the most important ones.
For our members of Cannabis Investor’s Report and The Cannabis IPO Insider, I give suggestions not only on which stocks to buy, but when to sell, too. But even those are general guidelines. I don’t give individualized investing advice because each individual is different, and I don’t know everyone’s circumstances. So if I suggest selling a stock to take some profits and some members decide to hold on to it, that’s perfectly fine! Likewise, if some event in someone’s life means they have to sell a stock before I recommend selling it, that’s OK too.
I will say this: As cannabis investors, we have the clearest roadmap to profits I’ve ever seen in over 30 years in the investment business. We know there will be bumps on the road, but we also know where the road is going – to the top of the mountain. So as long as you’ve done your homework and bought the stock of a good company and it remains a good company, it’s probably best to hold on to it during the bumps with an eye on that mountain’s summit.
We’re thrilled to take that road with you.
Executive Director, National Institute for Cannabis Investors
2 responses to “Q&A: Can You Pay for CBD with a Credit Card?”
March 30 2019