Recently, Oklahoma became the 30th state to allow cannabis use in a limited capacity. However, the world is turning its attention to Canada this fall in terms of marijuana legalization. In October, the G7 nation to the north of the United States is set to legalize marijuana in all forms and in all provinces. The news of this event is causing a frenzy among investors. In 2017, legal marijuana sales were upward of $6 billion in the United States. Investing expert and Banyan Hill Publishing editor Matt Badiali recently said that the sector may see enormous gains soon.
Why Investors Listen To Matt Badiali
Matt Badiali earned an undergraduate degree at Penn State University and a master’s degree in geology from Florida Atlantic University. He spent years traveling to foreign locations such as Singapore, Haiti, Switzerland, Papua New Guinea and many other places. As a hands-on learner and worker, he went to oil fields to check on workers and operations. He learned about unique local problems, politics and other important factors. After a while, he developed a passion for investing.
Matt found that his determination and his meticulous research methods made him an excellent adviser for earth metals and other natural resources. In the past, he recommended some specific base metal stocks that helped his followers make astounding profits. For about the past decade, Matt has been helping average people learn to invest smarter in natural resources. When he makes a suggestion, Matt researches everything that has to do with a specific industry or category. For example, he once recommended that his readers invest in the metals for lithium-ion batteries. He saw this opportunity because he paid attention to the growing trend of using lithium-ion batteries in electric cars, which are becoming more popular every year.
What Investors Are Saying About The Canadian Marijuana Investing Frenzy
In an article that he published on Banyan Hill, Matt Badiali said that he was not alone in his prediction of an upcoming investing boom in marijuana. Another trader and investor in Miami recently said that marijuana will be for Canada what Silicon Valley is for the United States. However, Matt pointed out the frauds and failures of the marijuana space, and he mentioned that Americans cannot invest in Canadian stocks. There are many small cannabis companies in the Canadian stock market. In the last boom, gold mining companies were the hottest tickets. One example was Newstrike Resources, which ran through its cash during the mining bear market without success. Some of the gold mining companies from the last boom have completely changed themselves to take advantage of the upcoming marijuana boom.
Newstrike is a prime example. When it learned about the new trend, it went through a reverse merger process and switched to marijuana instead of gold mining. A popular musical group in Canada became a big supporter of Newstrike, which added to its power. In 2016, its shares were under $.05 in Canadian currency, and those values shot up to over $3 after the hype started. That gain reflected an astounding increase of 5,900 percent. However, shares dropped back down to $.50 recently.
Growth Of The Marijuana Sector
Although Newstrike achieved notable success, not all mining companies will do the same. They do not have popular rock bands supporting them. Matt Badiali said that the risk is high in Canada’s marijuana sector. He referenced an American news article, which stated that more than 30 failed companies switched to the marijuana sector recently. The majority of those companies are now marijuana growers rather than dispensaries. Matt compared the market for growing marijuana to the market for craft beer. When cannabis is legalized completely, some alcohol and tobacco companies will become more active. As they gain an interest in the sector and become competitors, the prices will start to decrease.
Matt Badiali’s ETF Recommendations
For investors who are in the United States, Matt recommended some ETFs that are in the marijuana sector. One example is ETFMG Alternative Harvest, which has assets that total $380 million. The Marijuana Stock Alternative Harvest invests money in Canadian businesses. Another option for American investors is the AdvisorShares Vice ETF. The Green Organic Dutchman Holdings is its largest grower at 7.5 percent. Its focus is on marijuana, tobacco and alcohol. The entire sector will see benefits after Canada legalizes marijuana, and some alcohol and tobacco companies are already preparing to compete. For example, Constellation Brands and Altria have already invested in marijuana growers.
As Matt Badiali concluded in his advice letter, he encouraged readers to learn more about the marijuana sector before legalization takes place. By the time it happens, they will have sufficient knowledge to make informed decisions. However, it is optimal to follow the advice of a professional such as Matt Badiali. He shares valuable insight, research and tips with his paid subscribers.
Matt plans to continue monitoring the marijuana sector in Canada. One risk that every investor should watch for is the effect of the black market. Each country has its own unique structure on many levels. However, California’s sales of legal recreational marijuana were disappointing after the state legalized cannabis in the past. The reason for that was because of how easy and inexpensive it was to get on the black market. Many people were already using it, and some people were more comfortable buying marijuana the same way as they had been before it became legal. California is closer to Mexico and has a massive amount of marijuana coming over the Southern border. To learn more about the Canadian marijuana sector as legalization unfolds and as statistics become available, investors can follow Matt Badiali’s updates on Banyan Hill or his newsletters. He authors two newsletters called Front Line Profits and Real Wealth Strategist.
Read Next: To Invest in Marijuana Stocks, or Not?