A few weeks ago I took a business trip to Denver. I was out meeting companies in that area… and one of the key industries I went to look at was the Cannabis Industry. Yes, I was looking at the POT industry. Regardless of your views on the use of pot, you have to look at this industry. It's the growth industry of the decade. If you think about it, the pot industry is very similar to the Alcohol or Tobacco industries… and those are HUGE and VERY PROFITABLE. But I'm not going to sugarcoat it… the industry has MAJOR PROBLEMS too. Here we go… The Truth Behind Pot Stocks First, I'm going to give you the biggest positive here… GROWTH. The Pot Industry is growing like a weed in Denver. And it's not just growers and dispensaries that are cropping up. During my visit, I came across a half a dozen publications. They were advertising everything from Holistic Doctors to grow facilities to dispensaries. But that's not all. Pot Tour companies are finding huge success. Tours like you find at a winery are available! Equipment companies are found at every turn… pipes, cleaning equipment, grow equipment, even plant nurseries are on the rise. But it doesn't stop there. Thousands and thousands of new jobs have been created, and the economic growth is obvious. I love to chat with cab drivers (and now uber drivers) about the cities I visit… you can discover some amazing things. Like the fact that so many people are flocking to Denver, the price of housing is rising rapidly. The few cab drivers I spoke with indicated rent prices have doubled in just the last few years. One driver praised and cursed the industry in the same breath. He hated the fact his rent is going up… but loved the fact business was hopping and he was making more money. I witnessed the same thing. There was a buzz I felt in the city I'd never seen before. And clearly economic activity is hot… Bars and restaurants downtown were packed on a Tuesday and Wednesday night. Hotel rates are up and it was a struggle to book a decent place to stay. The Denver economy is back and I attribute it to the Pot Industry. Some Stupid Risks In The Pot Market Despite the growth, there are some serious threats to the Pot Industry as a whole. For example, while legal at the state level, Pot remains illegal at the federal level. In my opinion, this is something the Feds need to fix ASAP. They should regulate and tax marijuana just like the tobacco or alcohol industries, saving tons of money in drug enforcement action. But that's not the only reason. Consider this… one of the fastest growing parts of the industry are security companies. Every dispensary had armed guards and expensive security systems (at least the ones I visited). Why is security so high? It's because dispensaries, and by default the rest of the industry, is a CASH business. You see, because Pot is illegal at the federal level, dispensaries are PROHIBITED from opening bank accounts. They also can't get credit cards. So they buy their supplies and pay their employees in CASH. Talk to anyone in the industry and you'll quickly hear of employees transporting thousands of cash in nothing more than paper bags. Robberies in the industry are commonplace and lives are at risk… (but the Feds don't really care about that). The one bank who tried to set up in the state to serve the industry was quickly shut down by the Treasury Department. Talk about stupid. Pot Stocks Growing Like Weed Despite the issues, I like the idea of the Pot Industry. But there are very few high quality pot stocks to buy. The Pot Industry is like the dotcom industry back around 2000. Every company is claiming to be in the industry. The great growth rate is attracting both legitimate businesses and scammers alike. So, how do you invest and keep yourself safe? You use common sense. You look for Pot Stocks with real businesses (not just great ideas). You look for businesses with revenue… and hopefully income! You look for companies with real products and assets. Check those boxes and you'll screen out most of the garbage Pot Companies. Now, I think it's time to update the list of pot stocks in the industry. I don't have time today, but in my next article, I'll get you an updated pot stock list! (If you would like to see that list, please check it out here: https://pennystockresearch.com/.) Tell me, do you own Pot Penny Stocks? If so, which ones? Let me know on the blog!
Good investing...
Brian Kent
Note: If you're interested in learning more about Brian Kent's Penny Stock All-Stars premium service… and learning about the stocks we're trading for profit… you can get the inside scoop on penny stocks here. | 
No comments:
Post a Comment
Keep a civil tongue.