The market is waking up to this industry’s potential, whether it’s part of the Dow or not…
Last week, the Dow Jones Industrial Average crossed 30,000 for the first time in its 124-year history.
The S&P 500 Index was right there beside it, closing above 3,600 for the first time ever the week before.
These are two of the oldest stock market measures, and they’ve historically given us a reliable pulse on how the majority of stocks are performing.
All-time highs like this are as clear a sign as any that stock investors have moved on from the COVID-19 panic and are now looking forward to what lies ahead for United States companies.
But those gains are only showing us part of the picture.
The indices would be – and should be – even higher…
If they included the hottest sector in the U.S.
So, while the majority of investors are focusing on Salesforce’s 62%, Apple’s 58%, or Microsoft’s 35% year-to-date returns that carried the Dow to its lofty height, I want you to focus on what’s moving even faster…
The Hottest Sector in the U.S.
That sector is cannabis, of course.
More specifically, I’m talking about cannabis companies selling pot legally to American consumers.
These are the multistate operators (MSOs) – the vertically integrated companies giving people the product they demand in state after state through grassroots ballot measures and legislative action.
Companies like Trulieve Cannabis Corp. (OTC: TCNNF).
The gains Trulieve saw this year didn’t just recover COVID-19 losses. Rather, this stock has moved past the entire cannabis bust of 2019 and is now soaring to all-time highs. At $30, it’s nearly twice as high as the previous record set way back on October 3, 2018.
Green Thumb Industries (OTC: GTBIF) has nearly staged a full recovery, too. Its stock has doubled in price this year and sits less than 13% from the highest previous close ($23.16) it saw on September 18, 2018.
And Jushi Holdings Inc. (OTC: JUSHF), a relative newcomer to the cannabis space, is up 179% year-to-date (YTD) to $4.
Had any of these names been in the Dow, it probably would have hit 30,000 months ago.
Waking up to Cannabis’s Full Potential
But these gains are also only a small representation of the much bigger picture.
You can get a good look at how the cannabis industry is performing more broadly with our US Cannabis index, which tracks the performance to the top U.S.-based cannabis companies by market cap. As a group, these companies are up 53% for the year.
Meanwhile, the Dow is up 3.47%.
But even that incredible performance hides the real winners.
Zoom in on the top 10 performing MSOs, and you’re looking at average gains in excess of 110%.
Salesforce, Apple, and Microsoft average 51.67%.
And by the end of next year, all of those gains in cannabis stocks will be in the range of 10- to 20-times what it costs to get into the top cannabis companies now.
They see revenues doubling every few quarters. They see the capital invested in the past paying off for those management teams that managed their capital well. And they don’t want to miss how stocks react to surging revenues, soaring profits, and a sector that looks far less risky than it did in the past.
Revenues, profits, risk; having these three factors aligned in the right direction creates the most powerful tailwinds to investing in stocks.
You can see them converging right now behind the stocks of the U.S. cannabis companies that know how to play their cards, which is something I talked about in my cannabis industry 2021 forecast.
Whether cannabis companies are part of the Dow or not, the market is waking up to the industry’s potential.
And you do not want to be left behind.
Because when the first cannabis company joins a major index – something that’s well on its way, thanks to a major catalyst I’ll be bringing you more on tomorrow – you’ll want to be reveling in how much you made as an early investor…
Not regretting how much you could’ve made.
So, be the early investor.
Learn how to get started with 13 of my top pot stock recommendations right here.
Executive Director, National Institute for Cannabis Investors
December 01 2020