By Matt McCallJun 07, 2019
Greetings from one of my favorite cities in the world!
I’ve been in Toronto most of the week for two different marijuana investing conferences. Early in the week was The Cannabis Summit put on by The Economist magazine, and that was followed by the Life’s Cannabis Expo, which is the largest in Canada.
I have to say, if you still doubt how much investors crave good information about marijuana opportunities, you should come to one of these conferences. I’ve been doing it for 10 years, going back to when everybody else stayed away. These are big-time events now attended by thousands of people listening to CEOs, researchers, VIPs, and more.
These events provide valuable information and context. Yes, we can Google until our battery dies (bring on those next-generation batteries!), but nothing will ever replace face-to-face conversations with industry leaders, innovators, and people in the know.
It’s much more than the speeches. It’s impromptu conversations in the hallway or chats over coffee. And let’s just say, I need a break from caffeine after this week!
Many of the folks in attendance are executives at companies I recommend or am researching. Here’s just one example: I had lunch with the chief financial officer of a company I recommend in Investment Opportunities. It’s a fantastic opportunity that nobody else is talking about. I can’t give it away here, but I can tell you it involves the merging of two companies into a new company I think has 10X potential.
This CFO can’t give away insider information, but I came away convinced that everything is playing out just as I expected it would. I just updated subscribers in the new Investment Opportunities issue and reiterated that the key to big profits is owning before the merger takes place.
The opportunity in legal marijuana continues to grow, as evidenced by the conferences I attended and more headlines this week. Let’s look at a few key developments this past week in important investing themes.
Innovative Industrial Properties (IIPR) has now more than doubled in 2019. I recommended it less than a year ago, and the stock is up more than 180% since then.
This is another one of those opportunities that was under the radar for a while. The company buys properties from growers and then leases them back to them, providing necessary capital to the growers while setting up a stream of lease payments. All without ever touching the cannabis plant. That’s an advantage while marijuana remains technically illegal federally, even though I expect this to change sooner than most people think.
This illustrates another strategy to make money in the explosive marijuana trend, which is income. Again, most investors don’t even think about that possibility.
For example, I recommend a stock that contracts with early stage marijuana companies – which often find it difficult to secure funding – and is building a diverse (and extremely lucrative) revenue stream. Here again, the key with these royalty companies is to get there first – before the big payments start rolling in. And in this example, the big payments are right around the corner – so you still have time to get in early.
Jim Simons is a billionaire hedge fund manager. He’s also a mathematician and studies pattern recognition – definitely a useful skill for investing, as investors tend to follow the same patterns over and over again. When you combine investing and math, you get quantitative analysts – or the “quant guys,” as we like to call them.
Simons’ hedge fund is called Renaissance Technologies, and we learned this week that the company has taken a $6.3 million position in Aurora Cannabis (ACB).
Barron’s is also hopping on the marijuana train. Last weekend, it ran an article talking about marijuana companies south of the border. It highlighted something I’ve talked about with my readers, which is the low cost of growing and producing cannabis in Latin America thanks to its favorable climate.
One small company I recommend says it can produce cannabis oil for just 25 Canadian cents per gram. That’s a fraction of the cost for producers north of the border!
Earlier this week, I wrote to you about how Illinois had just opened up a billion-dollar market by ending marijuana prohibition. Illinois became the 11th state to legalize recreational marijuana, plus Washington, D.C.
The way this came about was key. Legal weed was approved by the state legislature, where in most previous cases it happened through referendums on a ballot. This has to be encouraging to pro-legalization politicians in other states… and in Congress. (It’s yet another reason why I expect full federal legalization sooner than you think.)
Well, the Illinois legislature didn’t stop there. It’s amazing how much can get done when you’re up against the summer break deadline!
On Sunday, that state legislature also legalized sports betting.
At some point in the future, you’ll be able to go to a Cubs game at historic Wrigley Field and bet on whether Kris Bryant will hit a home run in his next at bat.
I admit it. I was early recommending sports betting leaders. We got into a few after the Supreme Court’s historic decision last May left it up to states whether to allow sports betting. But I’d rather be early than late, and I really think the coming wave of sports betting legalization will be similar to what we’re seeing with marijuana.
Smart investors want to stay on top of the opportunity.
Automakers are joining forces as the race continues to make electric cars. On Wednesday, BMW and Jaguar Land Rover announced they are teaming up to build key parts for electric vehicles (EVs).
At the same time, an expected merger between Fiat Chrysler and Renault, which also included Nissan and Mitsubishi in the mix, exploded like old batteries that need to be replaced. Each side blames the other.
That’s a rare accident in this all-important race. Automakers are devoting a ton of time and money to develop fully electric cars that produce little or no pollution.
Better batteries are the key to this future. Japan is the current favorite to mass produce these next-generation batteries, with powerhouses like Toyota Motors (TM) leading the way.
In fact, Toyota and Subaru just announced a partnership to create a new electric vehicle platform. They will start with a compact SUV, and from there the plan is to use that platform for sedans and other SUVs. They confirmed that these will be BEVs… or “battery electric vehicles.”
Next-generation batteries will change just about everything in our lives, from how we get around to how we communicate with others. For early investors, this presents the kind of moneymaking opportunity that could turn a tiny initial stake into an absolute fortune.
P.S. Before my trip to Toronto, I spent more than a week in China. There are a lot of negative headlines right now about tariffs and trade disputes, but I came back convinced more than ever that nation is about to enter another growth phase. Some of the best-positioned companies are real bargains right now. I’ll share some of the key takeaways from my trip next week.
Self-driving cars – aka “autonomous vehicles” (AVs) – represent one of the biggest investment opportunities of the next 25 years. This innovation will transform huge portions of our economy and create trillion dollar ripple effects through time. It will create huge new winners in short periods of time. It will demolish losers in equally short periods of time. It’s critical that you stay on the right side of this trend. Learn more here.
Marijuana has been outlawed most everywhere for decades… but now a wave of legalization is starting to sweep the world. This will create massive new markets and massive stock market winners. Learn more here.
If I had to make one bet for 2019 it would be that betting is going to be big. The Supreme Court’s May 14 ruling cleared the way for states to allow sports gambling. And in my 25 years of investing experience, I honestly cannot remember many things that come close to magnitude of the investing opportunity that opened up to us. Massive amounts of money are involved in sports betting, and I expect massive amounts of money will be made, too. Learn more here.
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