A New Way to Play Legal Pot Could Soon Emerge
The numbers are incredible.
Forbes reports, “Spending on legal cannabis worldwide is expected to hit $57 billion by 2027.”
The figures come from new research conducted by Arcview Market Research and BDS Analytics. The report shows, beyond a reasonable doubt, that the legal pot industry is going to be a behemoth.
In North America alone, the legal cannabis industry is expected to grow to a whopping $47.3 billion by 2027, notes the Arcview report.
In the U.S. specifically, the legal market is expected to surge to $25 billion by 2025, according to data from New Frontier Data.
And as we drill down into the data, things look even better.
To date in the U.S., approximately 64% of the population now lives in a state or region where cannabis is legal in some form or another.
If you’ve followed my alerts over the past year, you’ll recall we’re moving a lot closer to 100% of the U.S. populace being able to use, buy or sell marijuana products.
But where is all this money going? We know big banks are reluctant to get involved with cannabis companies.
But with billions rolling in, this money needs to go somewhere. Which leads me to a budding opportunity in the pot space.
Pot’s in Its Early Innings and Banks Are Still Driving to the Stadium
It’s almost incredible the marijuana boom has occurred without the support and/or services of the big banks. It’s a real problem for companies, especially here in the U.S.
Brookings Institution fellow Aaron Klein notes, “Very few banks and credit unions accept marijuana-related businesses as customers,” despite it technically being legal for them to do so.
This is creating a void for a much-needed service to the booming pot industry. I think it’s only a matter of time before banks get with the program.
The first few that do could make great pick-and-shovel plays in the pot industry. It could even anoint smaller private banks to the publicly tradable sphere, offering even more ways to book profits off this industry.
Which Banks Will Be First Movers?
It’s a great question for folks looking to profit, but the answer is a lot more complicated than one may think.
As it stands today, few banks are willing to operate in this space. The ones that do are private banks.
But I think that is about to change. Pot investors and industry folks alike are patiently waiting for William Barr’s confirmation as new U.S. attorney general.
The soon-to-be No. 1 lawman in the land has stated he will not target any aspects of the legal marijuana industry and will respect states’ rights to operate accordingly with their own laws.
I think this means smaller regional banks could soon have a clear path to operate in the pot space, opening up a new way to play the space.
Those companies could be great opportunities. For example, Bank of Hawaii (NYSE: BOH) could be in prime position as the safe haven for legal cash generated in Hawaii’s legal industry.
Sierra Bancorp (NASDAQ: BSRR) is another example worth considering, as this bank operates smack dab in Southern California.
Of course, as of right now these are speculative ideas we expect to manifest down the road. However, a prepared trader is a paid trader.
But if this tweet from Politico reporter Zachary Warmbrodt is correct…
This new profit opportunity could take hold a lot sooner than first anticipated.
I’ll be tracking these developments closely. Stay tuned for more updates.
For Technology Profits Daily,
Chief Technology Expert, Technology Profits Daily