2019 Is Going to Be the Year for Pot Investors
Pot stocks kicked off to a great start in 2019’s first trading session Wednesday.
Consider it a preview of what’s to come for the legal cannabis market in the year ahead.
Last week, we talked about the U.S. states that are likely to legalize cannabis in some form or fashion this year.
Today, I want to fill you in on the other big drivers besides state legalization that I think will fuel penny pot gains in 2019.
Up First… Is Federal Legalization
On Dec. 20, President Trump signed the Agriculture Improvement Act of 2018 into law. One important piece of the law was that it legalizes one particular variant of cannabis: hemp.
Per the bill, “hemp” is defined as any Cannabis sativa plant that has THC (the principal psychoactive component of pot) below 0.3% on a dry weight basis.
The bill opens the door to legal cannabis production for hemp products — like clothing, construction materials and biofuel. Heck, Mitch McConnell signed the bill with a hemp pen.
Maybe more importantly, hemp is also a great source of cannabidiol, or CBD, the substance that’s linked to most of the medical benefits of cannabis. CBD has been shown to have incredible anti-inflammatory properties, which have therapeutic effects on a litany of serious health problems.
It’s an exciting development.
Finding Profits From Failure
Another important driver is going to be the fact that I expect many pot companies to fail in 2019.
Bear with me…
In the past few years, cannabis has been a relatively hot area. Any company that launched in late 2016 and said that they were going to grow legal weed found no shortage of funding — whether or not their business plan was real or practical.
The irony is pot businesses today are probably more real than ever (thanks to the regulatory doors opening around the world), but capital is more scarce thanks to a market that’s got investors spooked.
Odds are we’ll see some of the pot stocks with flimsier financials fail this year.
But that’s a healthy thing for the industry.
It’s normal to see leaders take the reins as an industry matures. Amazon.com survived the dot-com bubble — Pets.com (and scores more) didn’t.
We’ll focus on the Amazons.
For Technology Profits Daily,
Chief Technology Expert, Technology Profits Daily