“U.S. CBD Market to Grow 700% Through 2019”
Pot stocks continue to endure volatile — and downright frustrating — trading this summer.
No publicly traded cannabis stocks have been spared. But when market moves don’t make logical sense, it typically means that an opportunity is afoot.
And we’re seeing that opportunity take shape right now!
Let’s go to the chart.
The Long and Short on Cannabis
At a glance, you can see the 2019 correction is what most cannabis investors are still fixated on…
However, there’s a much more powerful long-term uptrend that’s been propelling pot stocks higher for more than three years now without fail.
In June, our Penny Pot Index touched that uptrend line for the first time since the fall of 2017, and it’s been quietly moving higher since then.
The correction in cannabis stocks this year has been frustrating. But in the context of the longer-term trend, it’s a blip on the radar.
And all signs point to the correction coming to an end this summer.
You might be wondering what’s driving the overall pot market higher in the longer term…
That brings us to our second chart, which comes from The Green Fund:
Legal cannabis spending has been carrying out a parabolic surge higher since 2016 — and several independent sources estimate that it’ll eclipse $40 billion by 2024. That’s an astounding amount of money pouring into a very concentrated collection of small companies.
Previously, I’ve filled you in on many of the political updates that are clearing the way to more legal access to cannabis. It’s an unstoppable trend.
And it’s inevitable that the price action catches up with the cold, hard cash that these companies are bringing in.
Then why the correction?
I’ve never shied away from saying that there will be winners and there will be losers in the cannabis business.
There’s a world of difference between the innovators in the legal cannabis market and the also-rans trying to ride the hype of publicly traded pot.
Still, it’s not always easy to tell the two apart.
The fact that cannabis stocks are trading lower across the board this year is an indication that investors aren’t comfortable deciding which stocks belong in which groups — they’d rather just discount everything.
In other words, the best cannabis stocks are trading for less than they should while the worst are trading for much, much more than they should.
And as I said at the beginning of this letter, that mispricing in the best names is creating a huge opportunity.
Speaking of which…
The U.S. CBD Market Is Expected to Grow by 700% This Year
The Brightfield Group, a leading market and consumer intelligence firm, recently conducted a report assessing the health and future of the U.S. cannabidiol (CBD) industry.
According to their study, the group found that through the end of 2019 the CBD market in the U.S. will have grown by 700%.
Additionally, the report notes that through 2023 the U.S. market could grow to over $23 billion. It points out that the bulk of the growth stems from big-name retailers like CVS and Walgreens entering into the CBD market, which provides a ton of exposure to mainstream consumers for cannabis companies.
Yes, we’ve heard some rumblings from the FDA about the efficacy claims associated with CBD therapies. But this is only a good thing. Fair regulation will force bad actors out of the space and allow good actors to grow and you to profit off this growth.
Bottom Line: Short term, the pot markets will probably endure some more chop. But long term, as highlighted above, all signs are signaling positive for big money gains with pot stocks.
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Chief Technology Expert, Technology Profits Daily