I’ve been bullish on the pot industry for years now. But I have to say that we may soon be entering the most profitable time in the industry’s life cycle.
That’s because federal U.S. marijuana legalization is closer than it has ever been. This means U.S. marijuana companies are going to proliferate (and likely earn investors a ton of money).
The 2020 presidential election is something I’ve been following for a while now, insofar as it relates to the marijuana industry. I’ve written extensively about how this is the best crop of presidential candidates the pot industry has ever seen.
In fact, it’s not crazy to think that, in 2021, we could have a sitting president with a pro-legalization agenda.
As you may know by now, the largest surges in the marijuana industry come via legalization. After all, the drug can’t be legitimately sold unless it’s legal, and many countries around the world have yet to legalize it. The U.S., of course, is the most important and most sought-after market.
And that brings us to the opportunity here: to turn the growing momentum behind U.S. marijuana legalization into real value for investors.
Consider Curaleaf Holdings Inc (OTCMKTS:CURLF, CNSX:CURA). This U.S. marijuana stock has been surging in 2020, up more than 16% year-to-date (at the time of this writing).
Curaleaf also happens to be the first marijuana company to claim that it will see over $1.0 billion in profit in the coming fiscal year. That alone makes it worth watching. Add the fact that it’s the largest marijuana company in the U.S. and this becomes a very appealing stock.
But there’s volatility with CURLF stock, and it has to regain significant ground after its weaker performance at the end of 2019. Other U.S. marijuana companies won’t have to face that problem.
As legalization momentum grows, we can expect to see more U.S. marijuana stocks hit the market.
And when the U.S. finally legalizes pot at the federal level, we’re going to see billions of dollars flood into the legal market, expanding it virtually overnight.
Some U.S. marijuana penny stocks will see exponential growth. Furthermore, many of the larger Canadian weed players will want to get in on the U.S. action.
This means many of the smaller, young marijuana companies will be prime targets for acquisitions. These deals usually result in strong payouts to shareholders, meaning that investors who get in early enough could see strong gains.
And then there’s the period of build-up toward legalization.
The process to fully legalize pot in the U.S. could take months or years after the appropriate legislation is passed. During that time, we’re going to see vast amounts of money pour into the most lucrative marijuana market on Earth.
As such, many of the smaller U.S. marijuana stocks that are sure to crop up will balloon in value.
It will be much like a repeat of the Canadian marijuana legalization process. That process saw many stocks gain by triple-digits in the lead-up—and follow-up—to legalization.
And the best part is that, depending on how successful the U.S. legalization process is (which is contingent on several factors, including taxation, regulations, and how authorities treat the black market), we could see pot stocks grow for years after legalization.
As I have said many times, the pot industry is nowhere near its full potential. With federal U.S. marijuana legalization, the industry would take a huge leap forward, but even then, there would still be opportunities for growth.
If the U.S. federally legalizes cannabis before, say, European countries like Germany and the U.K., then we can expect to see massive gains as U.S. marijuana companies look to expand globally while also maintaining steady streams of revenue at home.
This would be the best-case scenario: the U.S. legalizes marijuana in 2021 and then many European countries follow suit. Only now, U.S. marijuana companies are able to quickly and effectively expand into those countries, giving investors continuous healthy paydays as hype continues to roll.
While there are certainly risks to the marijuana stock market and there are a lot of factors at play, at the end of the day, U.S. pot stocks represent some of the potentially highest-growth stocks of the next 10 years.
Analyst Take
The push toward federal U.S. marijuana legalization is gaining steam. As a result, U.S. marijuana stocks are going to become some of the hottest stocks out there.
Investors seeking long-term, strong investments with the potential to double—or even triple—their money should keep a close eye on the U.S. marijuana market.
