There’s never been a better time to be a cannabis investor, and you’re about to see why…
Mark my words – this is the moment that will kick off Cannabis 2.0 – what former Speaker John Boehner and I spoke about back in October as the next phase of the cannabis revolution.
When I first sat down with the National Institute for Cannabis Investors to shoot our summit with John, behind the scenes, we spoke for a while about the political landscape of the cannabis market.
We talked about the obvious: hemp, various upcoming legalization like the SAFE Banking Act and STATES Act, and the likelihood of federal medical legalization first with recreational to follow.
I had always thought we would see the Democrats or Republicans run off a medical regime for the 2020 election year, and if approved, federal legalization going into effect around 2022 or 2023.
Now, I can’t reveal what the former Speaker of the House told me behind the scenes…
But let’s just say I’m reasonably confident we’ll see a significant federal shift within the next few years.
Today, I’m going to tell you about the publicly traded cannabis company that could be the biggest benefactor of all this.
Cannabis Legalization Pushes Forward
There are three big developments in the U.S. that show cannabis investing is about to become more profitable than ever before. One has already passed, one has been approved by a committee, and one has been proposed.
The revised 2018 Farm Bill was passed in December 2018 and aimed to support and enhance farm programs by improving crop insurance, maintaining disaster programs, promoting conservation, and legalizing the production of hemp. Hemp, a form of cannabis, has lower concentrations of THC and higher concentrations of CBD. The revised Farm Bill also made it easier for farmers to get production licenses, loans, and access to federal banking systems.
Secondly, the SAFE Banking Act could really speed up the maturation of the cannabis industry.
The marijuana industry has already completed its first monumental strides… but according to this recent announcement, this was only the beginning. In fact, there could be an entirely new wave of millionaires minted – virtually overnight. This rare occasion doesn’t happen often – so take this as a final warning. Full story…
The House Financial Services Committee approved the updated SAFE Banking Act, which provided guidance to U.S. financial institutions working with legal cannabis businesses. It prevents federal banking regulators from interfering with or punishing banks that work with cannabis-related businesses that are obeying all state laws.
Additionally, the bill would protect ancillary businesses that work within the cannabis industry. If passed, this would revolutionize the way banks and cannabis firms operate in the states. Today, multi-state operators (MSOs) still run a cash business and bank with state-chartered credit unions.
Finally, the STATES act was introduced mid-2018 and would exempt state-legal cannabis from the Controlled Substances Act, allowing every state to legalize and regulate cannabis as it sees fit.
That means federal agents could not raid legitimate, state-licensed businesses or seize products. Additionally, the STATES Act made cannabis banking easier by clearly stating compliant banking transactions are not considered a form of money laundering.
How This Will Make You Money
Now, what I’m getting at is the dominos are falling into place – one act after the other – and there is one company that is taking advantage of all of this: Canopy Growth Corp. (NYSE: CGC).
Canopy seems to be capitalizing incredibly well – first with a significant entrance into the states via hemp-based CBD products, and now with the acquisition of Acreage Holdings (CSE: ACRG, OTC: ACRGF).
This is the biggest acquisition the cannabis industry has seen, and not just on a dollar basis. It establishes a fully legal, 100% compliant way for major Canadian licensed producers (LPs) to enter the U.S. market.
In essence, this deal paves the way for even more firms to enter the market.
Because cannabis is still federally illegal, Canadian and U.S. regulators have blocked Canadian companies from entering the United States cannabis market if they want to remain compliant. A solution was needed, and that’s precisely what Canopy’s CEO, Bruce Linton, found with the acquisition of Acreage Holdings.
Announced last Thursday, this deal structure is truly fascinating, yet so simple at the same time.
In the $3.4 billion agreement, Canopy will acquire all the outstanding shares of Acreage upon such time that cannabis production and sale becomes federally legal in the United States.
The resulting entity would become the largest and arguably the most powerful cannabis firm in the world, and Linton says it’s only going to mean good things for shareholders.
“By combining Acreage’s management team, licenses, and assets with Canopy Growth’s intellectual property and brands,” he said, “there will be tremendous value creation for both companies’ shareholders.”
However, I don’t want to focus on the rationale behind this transaction as it’s evident – what I do want to do is touch on what this means for investors, and what we can expect shortly.
The STATES Act and the SAFE Banking Act haven’t passed yet, but in my view, Acreage and Canopy wouldn’t let their announced structure hang out there forever if they didn’t have very high confidence that regulatory change would happen very soon so that they could close the deal.
Possibly, even this year.
Acreage’s team has strong political connections, and Canopy is backed by the powerhouse that is Constellation Brands (NYSE: STZ). Combined with my conversations with John and what I hear on the street, this all leads me to believe there is significantly more to this story than has been announced.
This transaction between Canopy and Acreage marked the moment we entered “Phase 2” of the cannabis revolution, which will pave the way for majors to enter.
That is why I am so excited.
It’s truly the moment we have been waiting for. Think big pharma, consumer packaged goods, and pet health companies. With a legal route to the U.S. market, everyone will get in on this industry.
The next wave of the cannabis revolution is before us, and it’s going to be more profitable than ever before.
As an early adopter to cannabis investing, you are right where you need to be.
IPO Expert, National Institute for Cannabis Investors
P.S. We’re about to see an explosion of new cannabis IPOs hit the market. And for smart investors who get in on IPO day, the gains can be incredible. We’re talking about the potential for each of these stocks to soar 200%, 500%, 1,000%, or more, practically overnight. And today, we’ve uncovered four potentially high-flying companies set to go public before May 15 that you can’t afford to miss out on. Just click here to find out more.
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April 24 2019