Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
VR and Gaming Becomes the Metaverse - 7th Dec 21
How to Read Your Smart Meter - Economy 7, Day and Night Rate Readings SMETS2 EDF - 7th Dec 21
For Profit or for Loss: 4 Tips for Selling ASX Shares - 7th Dec 21
INTEL Bargain Teck Stocks Trading at 15.5% Discount Sale - 7th Dec 21
US Bonds Yield Curve is not currently an inflationist’s friend - 7th Dec 21
Omicron COVID Variant-Possible Strong Stock Market INDU & TRAN Rally - 7th Dec 21
The New Tech That Could Take Tesla To $2 Trillion - 7th Dec 21
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
GOLD HAS LOTS OF POTENTIAL DOWNSIDE - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Profits in This Market Are About to Rocket

Companies / Investing 2014 Apr 09, 2014 - 02:15 PM GMT

By: Money_Morning

Companies

Peter Krauth writes: It's not often a new kid makes it onto the commodities block.

So I'm going to step beyond the realm of regular resources to discuss one that's burgeoning.

But like most new things that push existing boundaries, it's controversial.


Change can be disrupting... but it can also - in this case - be hugely profitable.

It's acquiring the marketplace qualities of long-traded commodities... one that has the opportunity to be its best performer for years to come.

You may have guessed I'm talking about cannabis.

And its controversial past is leaving a massive upside on the table to add double-digit (or more) gains to your 2014 portfolio now...

The Market Is Taking Shape and Stabilizing Profit Plays

We all know the Netherlands has decriminalized marijuana possession, allowing it to be sold in so-called "coffeeshops."

But April 1st brought important changes on the marijuana front in Uruguay. On that day, it became the first nation to allow the growing, sale, and consumption of pot, breaking totally new ground in the process.

Uruguayans of legal age can now purchase up to 1.4 ounces monthly from licensed pharmacies, and they will be monitored by a government database. Effectively, the country has legalized the entire process, from production to consumption, something no other nation has ever tried.

The Uruguayan government has done so in part to fight drug trafficking. Their hope is to gain the upper hand by regulating and taxing a market currently dominated by criminals.

The small nation of 3.3 million has evolved into a passage route for marijuana from Paraguay and cocaine from Bolivia. That has translated into a Uruguayan prison population where fully one-third of inmates are doing time for narcotics-related charges.

Enforcement and incarceration are both very expensive for governments.

But it's not just the cost of arresting, prosecuting, and jailing growers, dealers, and users that's motivating the legalization of pot.

At a time when government budgets are already overstretched, lawmakers are slowly recognizing that they're losing their so-called "war on drugs."

Pair that with medical benefits, and legalization is gaining traction in the U.S.

So far, 20 states plus the District of Columbia have legalized medical marijuana use with a doctor's recommendation. Of those, Colorado and Washington have gone a step further, allowing the use of marijuana for recreational purposes as well.

According to WebMD, the main use of medical marijuana is to treat pain typically caused by headaches, a disease like cancer, or even glaucoma or nerve pain.

And it appears those medical benefits can be significant, not to mention still massively underexplored.

Two Booming Markets in One

Of the nearly 500 compounds contained in cannabis, some 80 are used for scientific and medicinal purposes.

According to Agriconsultant, five of the most commonly used compounds are:

  • Tetrahydrocannabinol (THC): Psychoactive effects, but relieves mild pain, induces sleep, is antioxidant
  • Cannabinol (CBN): May limit spread of cancer cells, reduces muscle spasms, fibromyalgia, and insomnia
  • Cannabidiol (CBD): A primary compound for medical marijuana, proven to relieve convulsion, inflammation, anxiety, cough, congestion, and nausea and inhibits cancer cell growth
  • Beta-Caryophyllene: Reduces inflammation
  • Cannabigerol: Relieves intraocular eye pressure, used in glaucoma treatment

There are two main marijuana plant species, sativa and indica. Sativa has more stimulative effects, lifting appetite and energy, while indica tends to relax muscles, lessen pain, and encourage sleep.

In order to gain the benefits of both strains, growers have created hybrid plants. Most of the medical marijuana today is sourced from hybrid indica.

As for consumption for medical purposes, smokeless vaporizers that are mostly odor-free are becoming more popular than smoking. And the benefits are considerable; 95% of cannabinoids are used, the medicinal effects happen within seconds, few if any delicate cannabinoids are destroyed, and toxins are minimal.

In Canada, for example, medical marijuana is used to treat severe arthritis, spinal cord injury, aids/HIV infection, multiple sclerosis, spinal cord disease, cancer, and epilepsy.

Leverage the $100+ Billion Projected Growth Opportunity

Some estimates call for total cannabis sales (medical and recreational combined) in the U.S. market to eventually reach as much as $120 billion annually, perhaps rivaling alcohol and tobacco, which had combined sales of $263 billion in 2008.

With increased acceptance and legalization of marijuana for both recreational and medical purposes, this is one resource whose production and use are sure to grow exponentially, perhaps for decades.

Which, of course, has left no shortage of penny stocks jumping into the fray...

The Marijuana Index was set up to track 36 cannabis-related companies listed on the various U.S. exchanges. To say the index has been volatile would be the understatement of the year.

The Index's 52-week low was nearly a year ago at $0.66, but saw a blistering 10,500% run up to nearly $70 in late February, for a performance reminiscent of Bitcoin. It has cooled off considerably since then, giving back more than 72%, to trade near $19 more recently.

My colleague Michael Robinson, Money Morning's Tech Specialist, recently highlighted GW Pharmaceuticals PLC- ADR(Nasdaq: GWPH), and it's my top choice within this sector. With a $840 million market cap, GWPH is in its own cannabis class.

The company is developing a portfolio of cannabinoid medicines. Its lead product, Sativex, is approved to treat spasticity from multiple sclerosis in more than 20 countries, and it boasts a pipeline of cannabinoid drugs in development.

MediSwipe Inc. (OTCMKTS: MWIP) is an interesting but much smaller play. The company mainly offers secure transaction processing and security solutions for the medical and healthcare industries. The interesting angle is the company's turnkey solutions for electronic transaction processing in the medical marijuana sector, and cloud-based patient data management. Furthermore, they provide equipment leasing and credit facilities for large-scale grow and retail operations and even sublease parcels of land in Colorado to fully licensed and compliant growers.

An intriguing but very high-risk play is a company called Republic of Texas Brands Inc. (OTCMKTS: RTXBQ). Use extreme caution, as it's actually looking to emerge from a Chapter 11 reorganization soon. Most attractive is the company's Chillo Hemp energy drink, sales of which could help achieve that goal. A cannabis-based tea drink is also in the works. It could get interesting, as the company has partnered with Amazon.com to sell Chillo.

Marijuana has long been associated with so-called "potheads" and shunned as an illegal drug. But I'd like to leave you with a thought-provoking quote from Dr. Sanjay Gupta, CNN's chief medical correspondent and neurosurgeon:

"It doesn't have a high potential for abuse, and there are very legitimate medical applications. In fact, sometimes marijuana is the only thing that works. We have been terribly and systematically misled for nearly 70 years in the United States, and I apologize for my own role in that."

As the wider public comes around to similar conclusions, this is one commodity that's sure to flourish.

Source : http://moneymorning.com/2014/04/09/double-digit-or-more-profits-in-this-market-are-about-to-rocket/

Money Morning/The Money Map Report

©2014 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in