The cannabis industry has just entered its most rapid phase of growth, and the companies that figure out this one thing will dominate the scene for years to come.
Cannabis just entered a new phase.
One through which this burgeoning market will speed towards $100 billion in sales in the U.S.
Along the way, cannabis investors can look forward to a $1 trillion in market value across all cannabis companies – at least for those with the brands and products to dominate this market. This means the biggest and quickest fortunes for cannabis stock investors are just ahead.
And those that don’t go “all in” on cannabis soon could well miss out on this once-in-a-lifetime chance to claim their stake before rapidly rising stock prices take that opportunity away.
We’ve entered a new growth phase that will spark a “Merger Mania.”
Smaller companies will join forces to gain ground on the market leaders, and big companies will acquire smaller ones in a furious attempt to stay ahead.
Companies not involved in the cannabis market will rush in to stake a claim in a market growing many times faster than their established industries.
And money from big institutional players will start pouring in as they realize they can no longer afford to sit on the sidelines and let legal uncertainty hold them back.
To emerge as winners from this phase, cannabis companies will strive for this one thing…
Cannabis Winners Will Scale
Cannabis companies must now do whatever they can to scale.
We actually talked about this very thing during the American Cannabis Summit.
Phase 1 was the “Opening,” with a ton of startups and small firms. We saw new players constantly entering the market. During this phase, nobody had a giant market share, so there were no clear winners yet.
Now we’re entering Phase 2, and we will start to see massive consolidation. Smaller companies start merging, and bigger companies acquire smaller ones. Cannabis stocks will rally the most in Phase 2.
Phase 3 will witness the mega-deals. The dominant players at that point will merge with one another and deals could eclipse $100 billion in value.
The prohibition of cannabis is quickly becoming a thing of the past. But within this million-dollar opportunity also lies nearly a million different hitters in the game – making it nearly impossible to identify the winners from the wannabes. That’s why we’ve done the heavy lifting for you – and narrowed it down to four pot stocks with MASSIVE upward potential… Just click here to find them out for yourself.
In Phase 4, the action slows down. Just a few big players dominate the industry, and some even graduate to blue-chip status.
And when Canopy Growth Corp. (NYSE: CGC) announced that it would acquire Acreage Holdings (CSE: ACRG, OTC: ACRGF) last week, I knew that the cannabis industry had entered a new phase of rapidly accelerated growth, the “Scale Phase.”
And to achieve scale, companies have two choices – build or buy.
To Build or to Buy
To build its way to scale, each cannabis company would build its own way to large, multi-state operations and national brands. This would mean going around applying for and winning cannabis licenses in each state, leasing storefronts for retail space, and building greenhouses to firm up supply.
But for most companies, building their way to scale would take too much time. The cannabis market moves fast, and anyone hoping to emerge from Phase 2 a winner cannot afford to wait.
So they will buy. They will acquire or merge with those companies that already have the licenses, distribution, and supply that make them the biggest cannabis firms the fastest. And the biggest gains will fall to those investors that own stocks in those companies most likely to acquire and those most likely to get acquired.
When Cresco Labs Inc. (CSE: CL, OTC: CRLBF) paid $823 million in stock to acquire Origin House (CSE: OH, OTC: ORHOF) it went for scale. These two stocks have been in our portfolios for months, and they’ve already made many of our members a ton of money. Now that they’re merging, those positions are poised to soar even higher as we enter the scale phase.
But the scale achieved through mergers and acquisitions isn’t just for the sake of size itself. The companies with the biggest national – or even global – footprints will borrow more cheaply. Or, like Cresco, Harvest Health, and Canopy have all demonstrated, they will use their stock as currency to fuel growth as quickly as possible through the scale phase.
That’s because with scale comes cheaper access to capital. Banks will offer cheaper financing to large cannabis companies who will use that cheaper financing to leverage up their balance sheets with borrowing.
And the cheaper capital gets, and the more leverage employed, the higher stock values soar.
Cheaper Funding, Soaring Stocks
And there are other forces at work that will drive capital costs down even further.
As more cannabis-focused REITs are launched, cannabis companies will free up expensive capital tied-up in real estate, boosting returns – and stock prices.
Legislation like the SAFE Banking Act and States Act will open capital markets, bring in larger investors, and lower the cost of funding as they desperately bid against each other to own cannabis stocks.
So there’s much to look forward to in Phase 2, and I’ll write all about the Merger Mania of Phase 2 already underway this week.
I’ll tell you this week all about the one company that will absolutely dominate Phase 2. This company reigns as the “King of Scale,” and every other cannabis company finds themselves hastily playing catch-up.
I’ll also be giving you a primer on companies issuing stock – how that can be done well and how some do it poorly. Stock equates to a company’s currency, and those that issue it for something useful get rewarded with a rising stock price.
Like me, I’m sure you found the “Opening” phase of cannabis growth exciting, but it will pale in comparison to what the “Scale” phase has in store.
And we want you to own stocks in those cannabis companies with the best chance to scale. These companies will lead the pack, and their stocks stand to return the most gains when the industry moves into the “Focus” phase.
So, look for a special report in your email this week about the “King of Scale.”
Executive Director, National Institute for Cannabis Investors
P.S. We’re still at the beginning of the legal cannabis industry, and it’s projected to grow a stunning 3,667% over the next five years. But because this industry is still young, some of its big hitters remain under-the-radar. So my team spent months researching, analyzing, and sorting through what we believe are the winners and the losers… and we’ve narrowed down the pool to these top stock picks. Some of these players are trading for $1. And right now, this tiny $1 pot stock could be your ticket in. It’s the same company that’s projected to generate BILLIONS of dollars in new wealth over the next few years. But things are moving fast, so today could be your last opportunity to see how to lock in this ground-floor opportunity… Before things really take off. One wrong move could leave you empty handed. And if you hesitate today, you could be throwing away your chance to become one of the industry’s newly minted millionaires. Here are the little-known pot stocks we’re targeting right now…
17 responses to “One Thing That Will Make Your Cannabis Stocks Soar”
April 22 2019