Cue the Four Horsemen of the Apocalypse … because marijuana is now bigger than baseball.
Yep. Major League Baseball earned $10 billion in revenue last year. It should earn about the same this year. Meanwhile, analysts at Arcview forecast that legal cannabis spending in the U.S. will total $11 billion this year. That’s up from $9.2 billion last year.
Say it ain’t so, Joe DiMaggio! It’s enough to make Mom cry in her apple pie!
But hold the tears. I’ll tell you how you can make money on this mega-trend.
It’s easy to see why baseball is losing the money race with cannabis. There aren’t any new major league baseball teams being created. Meanwhile, California legalized recreational marijuana this year. New Jersey and New York could soon follow.
And big U.S. companies are hopping aboard the party boat, too. Beverage maker Coca-Cola (NYSE: KO) is in discussions with Aurora Cannabis (OTCQX: ACBFF) to develop beverages infused with CBD. That’s a substance found in marijuana that won’t make you high, but that many health nuts swear by for all sorts of reasons.
Coke has good reason to make the move. Consumption of soda per capita is falling. It hit a 31-year low recently, with $76.4 billion in sales in 2017.
Meanwhile, cannabis sales in the U.S. alone could hit $75 billion by 2030.
That trend is ugly for soda and great for weed — and Coca-Cola wants to be on the right side of it.
It’s not the only one. Constellation Brands (NYSE: STZ) — maker of Corona beer, among other brands — has invested a big chunk of money in Canopy Growth (NYSE: CGC), a big Canadian cannabis company. Molson Coors (NYSE: TAP) is partnering with Hexo Corp. (OTCQX: HYYDF).
Full disclosure: Subscribers to my Supercycle Investor own some of these stocks, and I own others in my personal portfolio.
All this interest led to a huge surge in the price of Canadian cannabis grower Tilray (NYSE: TLRY) this week. At one point, Tilray had a bigger market cap than Twitter (Nasdaq: TWTR), CBS Corp (NYSE: CBS), Hershey (NYSE: HSY) and a host of other big names.
It calmed back down. But now we’re on to phase two. This is when investors scout out secondary names in the cannabis space.
They’re trying to get ahead of the wave. Legal cannabis sales are projected to keep soaring. In the U.S. alone, the marijuana market is expected to explode to $47.3 billion by 2027. That’s according to Arcview Market Research and BDS Analytics.
Worldwide, cannabis sales could hit more than $200 billion by 2032.
Now, what do you think this has done for the share price of the ETFMG Alternative Harvest ETF (NYSE: MJ)? It’s an ETF that holds a basket of marijuana stocks. An ETF I have recommended to you over and over and over again!
In just the past two months, the MJ fund has done this …
|Image Source: Stockcharts.com|
You can see that MJ is up 48% in the past two months. That’s about 10 times the performance of the S&P 500.
This is due to the fact that investors are pouring money into the fund. Here’s a chart from Bloomberg …
|Image Source: Bloomberg/Business Insider|
This ETF has seen $139 million worth of inflows in the past month alone. And look at that surge on September 19th!
And when money pours into this fund, it turns around and buys share of the stocks it holds — Canopy Growth, Tilray, Aurora Cannabis, Cronos (Nasdaq: CRON) and more. Heck, that’s why the market caps of the 22 largest pot stocks in Canada have doubled since August 15!
To be sure, the MJ fund is more volatile than the S&P 500. A lot more volatile.
But the big green wave is coming. This is a massive trend. That means, if you have the stomach for volatility and the steel spine to ride out dips, pullbacks can be bought.
Because, to put it in baseball terms, this is your opportunity to score a home run.
All the best,
P.S. Would you like an exclusive insight into my hottest investment picks? Then you MUST attend the New Orleans Investment Conference. New Orleans is a great city anyway, and this is an excellent conference. Doug Casey, Rick Rule, Brien Lundin and many other razor-sharp investors will share their insights with attendees. If you want to find more about it, CLICK HERE. And I hope to see you there.