They think it’s all about “stoners” getting high.
This is the stereotype Hollywood pushes with films such as the Cheech & Chong movie series in the 1970s and 1980s and the 1998 hit The Big Lebowski.
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Jeff Bridges as Jeffrey “The Dude” Lebowski, a stereotypical “stoner.” Source: The Big Lebowski
It’s also the stereotype Washington’s War on Drugs warriors have wanted to keep in place.
But as I (Chris Lowe) have been showing you, what’s so exciting about cannabis is its medicinal properties.
Aside from the chemical compound that gives you a feeling of euphoria and relaxation (THC)… the cannabis plant contains 112 other compounds that interact with the cannabis receptors in our bodies.
These compounds – called cannabinoids – have different effects.
The best-known, CBD, reduces epileptic fits… is an anti-inflammatory… and helps with sleep. THCV suppresses appetite. CBG may suppress cancer growth. THCA reduces nausea and vomiting. CBN may help broken bones heal. The list goes on…
In short, the cannabis plant is a millennia-old living medicine cabinet… with truly mind-boggling potential.
And this is a major driver of the legal cannabis megatrend.
According to research firm BDS Analytics, 56% of consumers use cannabis for medical and health purposes. As the medical cannabis legalization trend rolls on… and hundreds of millions more medical cannabis consumers join the market… this will act as rocket fuel for sales and profits.
Yesterday, the United Nations (U.N.) commission voted to recognize the therapeutic power of cannabis.
It lifted its 59-year ban on medical cannabis.
This is life-changing for millions of patients around the world who rely on medical cannabis.
They use it to ease the symptoms of everything from post-traumatic stress disorder (PTSD)… to pain… nausea… anorexia… epilepsy… and multiple sclerosis.
As you’ll see today, this news also paves the way for the legalization megatrend in North America to spread around the world.
Humans have used cannabis as a medicine for thousands of years.
There are records from second-century China that physicians there used cannabis as an anesthetic. And the Ebers Papyrus, from about 1550 B.C., describes medical cannabis use in ancient Egypt.
Cannabis only wound up classified as a dangerous drug in the U.S. because President Nixon wanted to wage a war against his political enemies.
In 1970, his second year in office, Nixon signed into law the Controlled Substances Act. This classified cannabis as a Schedule 1 substance along with heroin, MDMA (“ecstasy”), and LSD (“acid”).
Tricky Dick claimed cannabis was highly dangerous and addictive. That’s why he and his attorney general, John Mitchell (later disgraced along with Nixon in the Watergate scandal), wanted it categorized alongside heroin and LSD.
But that was a lie. As Nixon’s domestic policy advisor at the time, John Ehrlichman, later explained in an interview…
We knew we couldn’t make it illegal to be either against the war or black, but by getting the public to associate the hippies with marijuana and blacks with heroin, and then criminalizing both heavily, we could disrupt those communities.
And not satisfied with driving cannabis underground only in the U.S., Washington’s War on Drugs warriors wanted it banned worldwide.
As America fought its War on Drugs, U.N. law mirrored this same crazy categorization of cannabis alongside highly addictive and dangerous drugs such as heroin.
But as of this week, the U.N. has reversed its blanket ban on cannabis.
Following independent scientific research by some of the world’s leading experts, the U.N. no longer considers cannabis as “particularly liable to abuse and to produce ill effects.
You can see it in the screen grab below from the U.N. website.
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Source: The United Nations
If you want to know where legalization of medical cannabis is going, pay close attention to the countries that voted yes on the reclassification at the U.N. level…
The U.S., India, Nepal, Thailand, South Africa, Spain, and France voted in favor of the U.N. law change. But they haven’t already legalized at a national level themselves.
This now leaves the door wide open for them to do so.
Banning cannabis for more than a half-century has not only had perverse societal effects… It has also thwarted research into the plant’s medicinal properties.
So we’re only starting to grasp the full potential of cannabis as a medicine. It’s why Casey Research analyst Nick Giambruno believes the cannabis megatrend is nearer to the beginning than the end. Nick…
I have no doubt there will be significant breakthroughs in the months and years ahead as THC, CBD, and especially the other 111 cannabinoids are thoroughly researched.
Just think of how big the cannabis boom has been so far, and that’s only with our minimal knowledge of just THC and CBD. The true potential of all 113 cannabinoids – and the thousands of combinations of them – is truly mind-boggling.
Nick turned bullish on legal cannabis stocks back in June 2017… ahead of Canada’s decision to fully legalize cannabis nationwide.
And although all his picks haven’t been winners, the top two are up triple digits.
Innovative Industrial Properties (IIPR) leases commercial property to U.S. cannabis companies. It’s up 876% since Nick added it to the Crisis Investing model portfolio in July 2017.
And Canadian-based cannabis company Canopy Growth (CGC) is up 306% since Nick recommended it a month later.
Now, he’s on record with another bold prediction about medical cannabis…
Right now, 36 states have approved medical cannabis laws. But medical cannabis is still illegal at the federal level.
Nick says that’s about to change.
I talked to him about it last month for our Legacy Inner Circle advisory (paid-up members can catch up in full here). Here’s what he told me…
On the federal level, medical cannabis will be flat-out legalized. It’ll be legal everywhere. Recreational cannabis will then be decided on a state-by-state basis. It will not be a federal issue. That’s how I see the changes in cannabis prohibition coming to the U.S.
That will have a knock-on effect worldwide. Nick again…
Once the U.S. moves on this, it’s going to change in the rest of the world. That’s because the U.S. is the main foundation for cannabis prohibition globally.
When the U.S. relaxes its restrictions, other countries will follow. Not all of them, but it’s going to change the game worldwide.
That’s why I keep urging you to position yourself to profit… even though, emotionally, that may not be easy.
I’m not going to sugarcoat it: It’s been one of the most brutal bear markets I’ve seen in the 20 years I’ve been an analyst watching financial markets.
Between March 2019 and March 2020, cannabis stocks plunged 78%… 80%… even 99%.
And the exchange-traded fund (ETF) we use here at the Cut to track the sector, the Horizons Marijuana Life Sciences ETF (HMLSF), plunged as much as 81%.
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So I don’t blame you if your first reaction is, “Legal cannabis stocks? Not for me. I don’t want to get burned.”
Here’s the thing: Cannabis stocks are no longer in a downtrend. As you can see from the chart above, they’re in an uptrend.
But investor sentiment is still so banged-up, you can buy in at steep discounts.
Take price-to-sales (P/S) ratio as an example. This shows how many dollars investors are willing to pay for each dollar of sales a company booked over the past 12 months. The higher the ratio, the more expensive the stock is.
Below is a chart of the average P/S ratio of the top five stocks in HMLSF. At their peaks, these stocks were trading at well over 100x their sales figures. Now, the average is down to 30x.
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Remember, it’s not what you buy that determines your success as an investor. It’s how much you pay. The cheaper, the better.
Meanwhile, the legalization megatrend continues to roll forward… expanding this market by hundreds of millions of people.
It’s hard to imagine a better setup.
I’ve been recommending you play it by buying shares in HMLSF. It tracks 26 leading global cannabis stocks. That makes it an easy, “one-click” way to get exposure.
For the chance at bigger gains, you can learn how to access Nick’s top cannabis picks here.
Just remember, like with any other brand-new industry, legal cannabis stocks can be highly volatile. So make sure to keep your position sizes small. And brace for a bumpy ride.
Regards,
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Chris Lowe
December 3, 2020
Bray, Ireland