One company is hard at work protecting hordes of cannabis cash…
In 1848, James W. Marshall reported that he found gold in California in the 120-mile long American River.
That propelled the “California Gold Rush” of 1848-1855, which led to over 300,000 prospectors racing to the Golden State during that time to find their fortune.
Tales of newly-minted millionaires who had mined the precious metal flooded the front pages of newspapers around the country.
But there was someone else during that time who cashed in on the gold rush in a different way – Levi Strauss.
Instead of making his fortune by digging for gold, Strauss sold durable trousers to miners. That’s what we call an ancillary business. In the case of Strauss, he didn’t make his money from digging for gold.
He made it through supplying the needs of the gold industry.
And thanks to the Gold Rush, Strauss had the wheels in motion to build a clothing empire.
When he died in 1902, his estate was worth $6 million. In 2018, that would have been equal to $174 million.
In cannabis, there’s also a way to make money without touching the plant.
Protecting the Billion-Dollar Cannabis Industry
Being an all-cash business, a dispensary looks like a giant piggy bank to thieves.
In fact, Denver dispensary burglaries hit a three-year high in 2019.
Now, when cannabis companies are finally allowed to accept credit card payments, that should help cut down on the hordes of cash that are currently stored inside of their businesses.
But consumers are still going to use paper money to buy edibles, and a security system of some kind will always be needed for dispensaries, growhouses, and the transportation of cannabis.
That’s where Brink’s Co. (NYSE: BCO) enters the picture.
The Value of Safety
Founded in 1859, Brink’s provides security services around the globe. Its clients include banks, mints, and jewelers, so the company will always be busy.
And it’s going to be even busier as it expands its services to protecting cannabis businesses.
In 2018, Brink’s entered into a multi-year agreement to provide Canopy Growth Corp. (NYSE: CGC) with secure logistics and cash management services.
Now, Brink’s doesn’t fit into our Cannabis Investor’s Report model portfolio because it’s not a pure-play cannabis stock.
Nevertheless, Executive Director Don Yocham believes BCO offers a profit opportunity.
“Brink’s is in an excellent position to boost its profitability by serving cannabis companies. It can be quite dangerous for employees of cannabis companies right now. They deal in cash, and you hear stories all the time of a CEO hauling $2 million around in a backpack to go pay taxes at the local IRS office. Brink’s services improve that safety,” Don said.
He also likes where the company is heading.
“For starters, the company has a long history of creating shareholder value – so management quality is high. And based on the expectations for revenue growth – in part due to entering cannabis – the rate of value creation is only going to climb. And that’s a powerful driver of stock performance. Brink’s is a great way to play cannabis without buying actual cannabis companies.”
Brink’s also rewards its shareholders with a dividend of $0.60 and, depending on your brokerage service, you should be able to utilize a dividend reinvestment program (DRIP).
Instead of cashing out your dividends, a DRIP automatically buys more shares of the stock for you.
So you can keep accumulating more shares without having to pay a dime!
To your investing success,
P.S. If you need to set up a brokerage account to buy your first cannabis stock, you can access our FAQ page, which has a list of five brokers to help you get started.
3 responses to “How to Make Money by Protecting Money”
January 27 2020