I read a fascinating report this week…
It’s about an investment that’s been making people phenomenal returns.
Even better, the report suggests even bigger gains are yet to come.
And I thought it’s exactly the sort of thing Monkey Darts readers would be interested to hear about.
Not just because of the size of these results…
But also because of the intriguing market that’s been delivering them.
(And no, it’s not Bitcoin or Cryptos.)
I’ll tell you more about the market in a second.
But first, those numbers…
£500 into £1.5 million
I’m talking about percentage gains of 3,986%, 69,000% and even 399,000% in as little as four months.
OK, maybe it’s just me…
But I find huge percentage numbers like that hard to get my head around.
So, I get the calculator out to see what they’d mean to me in cash terms… (had I been smart enough to have had any money in them!)
You’re probably way ahead of me here…
But a £500 investment in that 399,000% winner would have turned into £1,495,500.
Yes, £1.5 million in four months!
Even the smallest of the three returns I mentioned could have made my £500 into £20,430.
Where the hell do you get returns like that?
Bitcoin-sized profits… but NOT from cryptos
And if you’re thinking it must be Bitcoin or some other cryptocurrency, that’s a good guess…
As we’ve seen in previous issues of Monkey Darts, there have been returns of many thousands of per cent in the cryptocurrency space. (If you’d like to get involved in the Bitcoin Boom but not sure where to start, click here.)
Even crypto “Blue Chip”, Bitcoin itself, has increased by over 1,700% this year.
But the returns I’m talking about today are NOT from Bitcoin.
They’re not from any of those other high-achieving ‘altcoins’ like Ethereum, Ripple or Dash.
I’m talking about multi-thousand-percent gains from ordinary shares.
OK, when I say ‘ordinary’, what I mean is that they’re regular listed company shares being bought and sold on the stock market.
But in some ways, they’re far from ordinary… given that they deal in a commodity that until recently was illegal around the world (and still is in the UK!).
These companies are LEGAL drug dealers!
Specifically, they’re involved in the rapidly growing market for cannabis.
Not knocking out £10-bags of weed to kids in the train station car park.
This is a serious legal medical marijuana industry that’s building around the world – and has big pharmaceutical company execs quaking in their boots.
And it’s minting bold investors with some serious returns.
The end of a century of prohibition
As I’m sure you know, you can’t legally buy cannabis in the UK.
But other countries are more progressive.
The obvious one is the Netherlands.
European dope smokers have long flocked to Amsterdam’s coffee houses where you can buy it over the counter for personal use.
And other countries tolerant of cannabis include Switzerland, Denmark, Portugal and… er… Peru.
But this isn’t about where you can go if you want to smoke a joint without fear of being hassled by the local police.
Monkey Darts is about money and markets.
And how you can make one from the other.
And right now, there are two major markets at the centre of the marijuana theme: the US and Canada.
For a long time, cannabis was illegal in the US.
It made people mad and dangerous and was highly addictive.
That was the official line at least.
The big move came on 2 August 1937.
That’s when President Franklin Roosevelt signed federal legislation banning it outright.
Not just for smoking.
FDR even outlawed industrial hemp. (Although he later allowed emergency hemp production for use in military equipment such as rope and canvas during World War II.)
And even today, cannabis is considered illegal by the federal government.
It’s classed as a Schedule 1 drug. The Feds reckon it’s more dangerous than cocaine and methamphetamine.
Thankfully that doesn’t stop it being an investment trend, though.
Dope: Once banned, now legal
Even though it’s illegal under federal law, individual US states can decriminalise it or make it legal within their jurisdiction.
They can do that for two reasons: medical use and recreational use.
Here’s how the all-knowing Wikipedia puts it (I cross-checked it in other places too!):
“The federal government has articulated that if a state passes a law to decriminalize cannabis for recreational or medical use, it can do so, under the condition that a regulation system for cannabis is in place.”
And the list of states relaxing their laws has been growing.
Some have been allowing it only for medical use.
Cannabis has long been proven to have therapeutic and pain relieving properties.
More than half the states (29) now allow cannabis to be bought for medical use.
And that’s worth a hell of a lot of money.
Reefer Madness! The $55.8 billion market in medical marijuana
Grand View Research estimates “the global medical marijuana market is expected to reach a value of USD 55.8 billion by 2025”.
That’s up from $11.4bn in 2014.
It’s why I mentioned about Big Pharma bosses quaking in their boots.
Medical marijuana could cost them billions of dollars as patients turn to the weed instead of modern medicine.
Companies in the business of growing, processing and selling marijuana to the medical industry are in for good times.
That’s not to mention all the subsidiary businesses.
I’m thinking equipment makers and service companies.
You know – like the ‘picks and shovels’ merchants who made it big in the gold rushes of the 1800s.
The point is there’s a massive uptrend in the medical use of cannabis.
And it’s not just in the US…
The Independent reports that in July Greece became “the latest European country to legalise marijuana for medical purposes…”
The Czech Republic, Finland, the Netherlands, Portugal and Spain were ahead of the Greeks.
But even though medical marijuana is big, it isn’t the biggest growth opportunity…
The market for recreational use is likely to be even bigger.
Bigger than booze?
I’ve seen this being compared to the end of alcohol prohibition in 1933.
And that makes sense.
The “noble experiment” as it was known outlawed the sale of alcohol in the US from 1920.
The aim was to wipe out crime and corruption and promote health and hygiene across the US.
Anyhow, prohibition ended because the government needed the tax revenue.
When it did, companies involved in the booze supply chain boomed.
And that’s the opportunity we’re looking at now… as the end of the prohibition of cannabis takes effect.
And it’s early days yet.
Right now, only eight out of 50 US states have legalised recreational cannabis.
But they’re raking in big bucks in taxes.
And that’s going to lead to others doing it too.
Which could lead to serious windfalls for plucky companies ready to cash in on the trend.
The report I told you about earlier is predicting further 1,000% gains on the table for the right stocks.
And that’s just in the US.
That’s not to mention their friends to the North…
Prepare for the Canadian pot boom
Just this week, Canada was in the news as it gears up for a major cannabis shake-up next year.
And it’s not just province by province.
Smoking weed for fun could be legal across the country in one hit.
CNN’s headline on Tuesday ran:
Canada could make billions from legal pot
Here’s how CNN put it:
“Canada faces one last hurdle to becoming the first G7 nation to legalize recreational marijuana.
“Canada’s Cannabis Act was introduced in the Canadian Senate Tuesday, its last legislative stop. The bill enjoys wide public support and the backing of Prime Minister Justin Trudeau.
“Unlike legal U.S. states, which on average have taken more than a year to get their retail and tax infrastructure built, Canada will build on government-supported online sales that were implemented to support the country’s medical marijuana industry. Canadians buy their pot on websites and have it delivered.”
In just over 6 months’ time, Canada could have its own nationwide legal marijuana industry worth between $5 and $20 billion.
The chances are good that it’s going to mean some great opportunities for innovative companies involved in the cannabis space…
And no doubt a fare few failures and outright scammers that always seem to surface when there’s a big investment trend on the move.
So be careful out there!
The most established UK company in the legal cannabis market is GW Pharmaceuticals.
GW’s cannabis-based products are aimed at disorders of the central nervous system. And it has several products at various stages of the development pipeline.
It used to be listed both on the AIM market here in London and the US Nasdaq. But in 2016 it dropped the dual listing and now trades exclusively on the Nasdaq under the ticker GWPH.
As with any drug-related company, it’s all about the clinical trials and whether they make it past the strict US regulator, the FDA!
At a healthcare conference last week, GW’s CEO said that 2018 will be a “breakout year” for the company.
It’s one to watch.
My point is, just because this huge legal cannabis theme is largely playing out in the US and Canada, it doesn’t mean UK investors can’t get involved.
I did notice in one report I read that there are some Exchange Traded Funds looking to cash in on the legal pot boom.
That’s one way of spreading your risk over a selection of different shares – rather than throwing a dart at a list of pot stocks and hoping you hit a winner!
But I’ll do some more digging on this story and see if I can find any more interesting ways to get involved.
Keep an eye out in next week’s issue of Monkey Darts…