Which side of the pot debate are you on?… U.S. farmers are lining up to get into a niche cannabis market… Readers just locked in 363% gains on this legal pot stock… In the mailbag: “Let’s just hope and pray that EVs get us off the roads!”…
At least if you go by the flood of responses in The Daily Cut mailbag lately.
We’re talking about pot legalization.
Broadly speaking, readers fall into two groups when it comes to the legal cannabis debate.
Folks in the first group are worried about the potential harm caused by consuming cannabis. For instance, here’s reader Isabel O.:
If you drive after you smoke it, you are driving under the influence, just like many drunk drivers. I don’t want to be subjected to the stench of your choice either, whether cigarettes or joints. And these are just a couple of things that come to mind.
Now, if you want to indulge and stay off the roads and smoke inside your own four walls, I couldn’t care less what you do. Just don’t take it into the public places where others have to deal with your choice. But then, that would require self-discipline. And we all know that is pie in the sky.
Folks in the second group put more emphasis on the freedom to put whatever you want into your body without the feds getting involved. As reader Dean G. put it…
The Constitution guarantees life and liberty. Do those against the use of legal pot think that, by prohibiting pot, they are not violating the liberty of others? What else do they want to keep me from doing that doesn’t harm them when I do it? All of this shows what a primitive species we are.
And the debate rages on in today’s mailbag below.
We’d prefer less, not more, government in our lives.
And we agree with Legacy Research cofounder Doug Casey that less government is particularly important when it comes to what we decide to put in our own bodies. As he puts it…
Your primary possession is your own body. If you don’t own it, and don’t have a right to do whatever you want with it, then you in fact have no rights at all.
But it’s not our job to tell you what to think about the moral and ethical questions surrounding cannabis legalization. It’s your personal choice to invest or not. What we can tell you is that this is one of the most exciting profit trends on our radar at Legacy Research.
And it’s moving even faster than we expected.
Hemp is a tall, weedy plant that is a variety of the cannabis plant that gets you high.
It has zero psychoactive effects. But it has a number of important medical and industrial applications.
Hemp fiber is extremely tough. Some of the first ropes ever made were twisted from hemp fibers… including sailing ropes, hence the slang “reefer” for a cannabis joint.
Hemp is more durable than cotton when used in clothing. Hemp-derived materials can even build a car. Tightly woven hemp can be lighter than steel and can stand 10 times the impact without denting.
Like other varieties of cannabis, hemp is also used to extract cannabidiol (CBD). It’s a type of chemical compound called a cannabinoid that’s used to treat epilepsy, anxiety, schizophrenia, heart disease, and cancer.
Even the U.S. Food and Drug Administration – the federal agency responsible for licensing pharmaceutical drugs – sees the medical benefits of CBD. In June, after extensive clinical trials, it approved CBD oil to treat kids who suffer from severe forms of epilepsy.
The nation’s first president grew it… as did the nation’s third president, Thomas Jefferson.
Today, it’s legal to buy or consume hemp in the U.S. But along with the kind of cannabis that gets you high, it’s been illegal to grow hemp since the Marihuana Tax Act of 1937.
But that’s about to change when President Trump adds his signature to a bill that just passed through Congress.
You see, last week, Congress greenlighted a $867 billion farm bill.
And among a bunch of other farm-related measures, the farm bill removes hemp from the federal controlled substances list and classifies it as an agricultural commodity. That means farmers can grow hemp and not get tossed in jail.
It’s a crop farmers can grow easily. Hemp needs less water than cotton, corn, or soybeans. It grows in poor soil. And it grows tightly bunched up, leaving no space for weeds to grow.
There’s already a market for legal hemp products – for instance, clothing, CBD-infused beauty products, and supplements – in the U.S. that’s worth about $1 billion a year.
And as Doug put on your radar earlier this month, the industrial applications for hemp, as a substitute for cotton in fabrics and wood pulp in paper, are “gigantic.”
Despite this, because of what he called the War on Some Drugs, U.S. companies have to import hemp from Canada.
But now that growing hemp is about to become legal in the U.S., American farmers want in.
Yesterday, our in-house pot investing expert, Nick Giambruno, sent an email alert to paid-up subscribers of The Casey Report.
He recommended they lock in a big win on pot grower Cronos Group (CRON), a holding in the model portfolio since October 2017.
Readers who bought CRON back then pocketed a 363% gain. And Nick says this profit trend is just getting underway…
Now that hemp – prized for its high CBD content – is about to become legal at the federal level, I expect the CBD oil market to explode.
Market research suggests that the U.S. CBD market is currently worth roughly $500 million. But it could easily skyrocket to about $10 billion within the next three years. That’s 20 times its current size.
As impressive as that sounds, it’s probably conservative. Sales of Epidiolex, the CBD drug the FDA approved to treat epilepsy, are expected to reach $1.3 billion over a similar time frame. And that’s just one CBD product.
At a minimum, I expect the U.S. CBD market to grow 10 times larger in the years ahead. Shares of select publicly traded companies in the CBD industry could surge even higher.
Nick’s top performing pick over at our Crisis Investing advisory, cannabis grower Canopy Growth (CGC), remains a great way to play this profit trend.
It’s one of the biggest, best-financed pot growers in the world. And at just about $29 a share at writing, it’s still under Nick’s buy-up-to price of $50.
Just remember that the legal pot industry is still in its infancy, and pot stocks can be highly volatile. So keep your position sizes small. And treat this as a long-term speculation.
Your fellow readers have mixed feelings about the electric vehicle revolution… freedom… and the hot-button issue of pot legalization…
I am concerned about the state of awareness in humanity. Technology is a tool. It’s the state and development of an individual’s consciousness that determines how these “tools” are utilized. Informing with integral ideas is admirable. Keep the dialogue going.
– David H.
Pot, in itself, is not harmful. It is society that makes it harmful. As with alcohol, we humans tend to abuse the product and, ultimately, society becomes abused as a consequence. We will continue to deteriorate as a society. Let’s just hope and pray… yes, pray… that EVs will get us off the roads!
– Stan L.
Dean G. said: “Do those against the use of legal pot think that, by prohibiting pot, they are not violating the liberty of others? What else do they want to keep me from doing that doesn’t harm them when I do it?” His comment that we should not “violate others’ liberty” by keeping people from doing that which doesn’t harm others would have merit, except for his next statement of not keeping him from doing that which doesn’t harm others. The problem is, when he is high on pot and driving a car or running equipment, then he is harming others. I rest my case!
– Dawna R.
Will pot legalization be the nail in the coffin for American society? Or is pot prohibition an attack on our freedoms? Let us know at feedback@legacyresearch.com.
Until tomorrow…
Chris Lowe
December 19, 2018
Lisbon, Portugal
P.S. If you’re interested in hearing more from Nick on why he’s so excited about the CBD market, make sure and watch the new on-camera presentation he put together. In fact, Nick is so bullish on the profit potential of CBD, he calls it “liquid money.” Check it out here.