Here’s the story you’re not hearing about Amazon’s latest cannabis announcement…
Outside of shipping anything you want to your door in a two-day span, Amazon has also been busy creating knee-jerk reactions in the stock market.
When Amazon announced it was buying the online pharmacy PillPack in 2018, the CVS stock price dropped 8.47% and the Walgreens Boot Alliance stock price dropped 9.64% in pre-market trading.
Then when the news broke in 2019 that Amazon was testing a service called “Prime Stylist,” Stitch Fix (another curated clothing provider) saw its stock price drop nearly 5%.
This time, Amazon’s latest announcement was about cannabis…but the news didn’t send stock prices lower, instead…they went higher.
The company released a statement that said it will no longer screen employees for cannabis use and announced Amazon’s support for the Marijuana Opportunity Reinvestment and Expungement Act (MORE Act).
The MORE Act would de-schedule cannabis at the federal level, which would essentially decriminalize it nationwide.
It would create certainty.
Certainty that the federal government would not go after the Nasdaq or New York Stock Exchange (NYSE) for listing U.S. companies that directly sell cannabis.
When that happens, the dinner bell will ring and investors everywhere will rush in to buy cannabis stocks. The pension fund managers with billions of dollars at their disposal will start to purchase U.S. cannabis stocks, and the 13 million users on Robinhood will have access to American cannabis companies for the first time.
But if you know where to put your money before that happens, like we do at the National Institute for Cannabis Investors (NICI), you’re in the right place at the right time.
Soon, everyone will be willing to pay you much more than what you bought your shares for because you had the foresight to own cannabis stocks now, not later. That’s what investors were trying to do after the Amazon cannabis announcement, but they bought the wrong stocks.
They bought the ones that won’t make you rich.
I’m going to show you the wrong stocks people were buying so that you can avoid them.
The Cannabis Stocks to Avoid
Though Amazon announced their support for federal legalization, Canadian cannabis companies were the ones that saw their stock prices climb.
These were the one-day gains of three of the most well-known Canadian cannabis companies:
|Company||Date||Opening Price||Closing Price||% Gain|
|Hexo Corp. (NYSE: HEXO)||6/2/2021||$6.89||$7.18||4.2%|
|Aurora Cannabis Inc. (Nasdaq: ACB)||6/2/2021||$9.35||$10.10||8.02%|
|Tilray Inc. (Nasdaq: TLRY)||6/2/2021||$17.25||$19.00||10.14%|
There are pockets of opportunity to make money with Canadian companies, but the fact of the matter is that you will make the most money investing in American companies that sell cannabis across multiple states.
For example, in Canada in 2020, there were C$2.6 billion in legal sales.
Just in California last year, there were $4.4 billion in sales.
That’s why we always tell our members that the biggest opportunities to make money in cannabis are through U.S. companies that sell cannabis across multiple states, just like these two companies we think should be in any cannabis investor’s portfolio.
Meet Curaleaf and Ayr
The first company is Curaleaf Holdings Inc. (OTC: CURLF).
Over the next decade in the United States, walking into a dispensary to buy a pack of pre-rolled joints will be just as commonplace as it is right now to go into a liquor store and buy a six-pack of beer.
Curaleaf Chairman Boris Jordan knows that, and he has been planning to make sure his company is in the best position to make the most money as the U.S. is expected to become a $41.5 billion market by 2025.
Curaleaf wants to reach the 93% to 95% of U.S. households that don’t currently consume cannabis. To do that, it plans to eventually become just a processor and manufacturer of cannabis products.
That will cut out the cost of grow operations, and it will also allow the company to focus on its branding to stand out from the crowd.
“We’re making the products much more mainstream for our customer base – we’ll be no different than Coca-Cola or Frito-Lay,” Johnson said in an interview with Forbes.
The company already has operations in 23 states with a total of 106 dispensaries, making it the largest multistate operator (MSO) by dispensaries and operational states. That’s a good start in reaching the 93% to 95% of U.S. households that aren’t currently consuming cannabis.
And as more states start to legalize, Curaleaf will expand even more, both organically and through strategic acquisitions.
So just like Starbucks or McDonald’s, Curaleaf will make sure it’s everywhere that potential customers may be.
Company executives expect to report $1.2 billion in revenue for 2021, which puts it in the running to be the largest cannabis company by sales in the country.
The second cannabis stock that should be in your portfolio is Ayr Wellness Inc. (OTC: AYRWF).
Ayr is quietly working itself into the conversation of being one of the top multistate operators in the United States.
It plans to have more than 60 dispensaries open by the end of the year and currently has an addressable population of over 73 million people in seven states.
With 42 dispensaries planned to open by the end of 2021 in Florida, as of right now it will have the second-most dispensaries in the state. And Florida is an important state.
Despite only allowing the sale of medical cannabis, by 2025 research firm New Frontier Data projects it will account for 8% of all U.S. cannabis sales.
The only state projected to sell more legal cannabis than Florida is California.
A you can see from the slide below of Ayr’s recent investor presentation, in addition to Florida, it is also rapidly expanding across the rest of the United States.
Investors are pouring into the wrong stocks right now, but because you have us in your corner, you now know where to make the biggest returns.
Those in NICI Membership have 24/7 access to our model portfolio of investments and receive our trade alerts right to their inbox. If you’d like to learn more on how you can access those same opportunities, click here.
Partner, RADD Capital
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June 07 2021