Marijuana: The Next $100 Billion Market

By Wayne Mulligan, on Thursday, October 30, 2014

2012 was an historic year.

Not only was the JOBS Act passed, setting the stage for all citizens to invest in private equity...

But another set of groundbreaking laws was enacted as well – and they’ve led to the emergence of an exciting new $100 billion industry.

This new industry could deliver stunning returns for investors like you, and as we often write about, investors that get in early stand to reap the largest rewards.

Today, we’ll tell you about this new set of laws...

And we’ll show you the financial opportunities they’re creating for you.

The New Commodity

Today I want to introduce you to America’s next cash crop:


In 2012, Colorado and Washington made the use of recreational marijuana legal.

In short order, new industries popped up to produce and sell marijuana, and tax revenues started flowing in.

According to Reuters, Colorado’s tax revenues from marijuana already exceed $100 million.

And state budget experts are predicting next year’s marijuana sales to cross $1 billion.

If these laws were enacted at the national level, experts estimate that the U.S. could save over $13 billion per year. Why? Because enforcement of marijuana would no longer be necessary.

History Repeating Itself

Regardless of personal opinion about marijuana use, one thing is clear:

It’s only a matter of time before it becomes legal throughout the country.

And when it does become legal, investors who were well positioned – those who got in early – stand to make a killing.

Something similar happened when liquor prohibition was repealed back in 1933.

Those who saw the law change coming and took proactive steps to get ahead of the curve made fortunes.

For example, in the late 1920s, a man named Joseph Kennedy set up a number of exclusive liquor importing contracts with Europe’s top distilleries.

At the time, as long as it was for medicinal purposes, he was able to sell liquor to licensed alcohol producers. (Sound familiar?)

But once prohibition was repealed, Kennedy was sitting on the exclusive rights to import liquor – and sell it to everyone.

By 1950, he was one of the wealthiest men in the country.

Public “Pot Stocks”

A number of publicly traded “pot stocks” are out there already.

Most of them are traded on the pink sheets, or the Canadian venture exchange.

These companies are highly illiquid, lightly regulated, and trade more on rumors than business fundamentals.

For many of them, their management teams are focused on pumping up the price of their stock, and selling shares to the general public at inflated prices.

Our advice: stay away from these companies.

That being said, reputable players do exist in the market...

GW Pharmaceuticals (GWPH) is one example. GWPH is a British pharmaceutical company focused on the development of marijuana-related therapies.

Private “Pot Profits”

But as we recently discovered, some of the most promising opportunities in this sector aren’t in the public markets at all...

They’re on the private side.

Currently, there are hundreds of marijuana start-ups raising capital to get their businesses off the ground.

These companies break down into three groups:

  • Growers – These folks cultivate and grow marijuana
  • Grow Services – These are the “pick axe and shovel” companies of the sector
  • Technology Companies – These companies are on the periphery of the industry, providing technology solutions. For example, a company called “Weed Maps” shows users where to legally buy marijuana in their area.

And unlike their publicly traded counterparts, instead of trying to “pump up” the price of their stock, these private companies are aiming for legitimate growth.

Learning More

Marijuana deals haven’t started showing up on the equity crowdfunding platforms yet. But our friends at recently launched a service that provides a directory of private marijuana companies that are raising capital.

You can learn more about the service, 420 Funders, here »

This is new territory for everyone. But from the perspective of investment opportunities, we see many similarities between what’s happening now and what happened with alcohol post-prohibition.

That’s why we’ll actively be looking at deals in this space in the coming months.

If you’re interested in following along with us and learning about opportunities as we do, please reply to this email and let us know.

We’ll add you to our “Private Pot Stocks” mailing list, and we’ll be in touch as we see new opportunities.

Happy Investing!

(Please note: we have no relationship with or any of the companies on their service. Crowdability is an independent provider of education and research on the equity crowdfunding market.)

Best Regards,
Wayne Mulligan
Wayne Mulligan


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