Roadblock No. 2: No Institutional SupportAccording to one market insider, even before the election, "Big institutional investors [were] buying big slugs, quietly." Putnam Investments, Wasatch Advisors and Fidelity Investments have all taken large stakes in the industry. And one unnamed institutional investor just made a $100 million investment in Green Thumb Industries. But the reality is this: As long as cannabis is illegal on the federal level, the big trading houses will stay on the sidelines. But once that changes... and the floodgates open... the institutions will start buying up pot stocks like there's no tomorrow. You see, even if Goldman Sachs wanted to add U.S. pot stocks to its holdings, it couldn't. That's because all domestic pot stocks are essentially BANISHED to the over-the-counter market. Because of the federal prohibition on cannabis, U.S. pot stocks can't trade hands on the New York Stock Exchange or the Nasdaq. If they were to uplist to these more liquid exchanges, the financial institutions would likely deploy some of their combined $404 trillion in assets to acquire shares. Roadblock No. 3: No Access to Banking ServicesCheck out this chart. This shows the total equity capital of commercial banks in the United States. As you can see, these banks are sitting on about $2 trillion in capital. And I can guarantee you that not 1% of that capital is tied up in cannabis stocks. That's because these banks are federally insured and cannabis remains illegal at the federal level. And that's a huge problem for the marijuana industry. These businesses can't accept credit cards, acquire loans, set up deposit accounts, write checks or run payroll. Without these banking services, a lot of cannabis companies are stuck in neutral. Thankfully, there are multiple cannabis bills circulating in Congress right now that are trying to remove these roadblocks. There's the Secure and Fair Enforcement (SAFE) Banking Act, the Marijuana Freedom and Opportunity Act, the Marijuana Justice Act, and the Marijuana Revenue and Regulation Act - to name a few. And once these hurdles are cleared... Cannabis companies will be off to the races. The opportunity here - to get in before federal legalization occurs - is so much bigger than just joints and lighters. It will affect medicine, research, manufacturing, entertainment, food and beverage, and more. I recently teamed up with Bruce Linton, the founder and former CEO of Canopy Growth Corp., to discuss this exact topic. He said, "I think it's the single biggest economic shift that could occur." To hear what else Linton had to say about U.S. legalization, click here right now. Here's to high returns, Matthew |
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