- The fast-growing $6.4 trillion cannabis industry is set to disrupt three markets.
- With cannabis-infused drinks, the alcohol industry faces the biggest threat.
- Here’s how to make money and get exposure to the booming opportunities this industry creates.
That’s the size of three industries that cannabis will disrupt.
As investors, we can get in on the ground floor and buy these companies for pennies on the dollar.
That’s like having the chance to buy Starbucks, Anheuser-Busch or Nestlé when they were first starting out.
Read on to find out how you can make money from this booming industry.
Cannabis Will Disrupt 3 Markets
Watch my video below to catch the latest marijuana market update.
Cannabis offers unique opportunities for three different markets:
It’s versatile thanks to two compounds it produces: CBD and THC.
CBD won’t get anyone high. But studies show that it helps with forms of epilepsy, depression, insomnia and more. With more research, that list of ailments will grow.
THC covers the recreational side. It does get people high.
But smoking is becoming passé among millennials. Smoking rates are down 25% among young adults from a decade ago. Cannabis isn’t fighting Big Tobacco — it’s threatening the alcohol industry.
THC and CBD can be extracted from the leaves and buds of the marijuana plant.
Extractors are specialists in the industry. They pull both compounds from the plant with pharmaceutical precision.
The extract takes the form of a thick “crude” oil. Producers can refine the oil and make the exact concentration of THC or CBD they desire. It’s then ready for ointments, edibles and even drinks.
Wellness: A $4.2 Trillion Global Market
The wellness market revolves around the use of CBD. Companies can use it in foods, ointments and drinks such as tea or kombucha. This is a $170 billion industry in the U.S. alone.
But the CBD industry is waiting on the green light from the Food and Drug Administration (FDA) before it can take off.
The FDA is reviewing the use of CBD in food and drinks. Once it allows CBD in those products, there will be a race for big brands to partner up with CBD producers.
Mondelez International, the maker of popular brands including Oreos and Chips Ahoy, hinted that it would add CBD lines of snacks once it’s legal. Most large packaged-food brands are likely considering similar moves.
While the use of cannabis in this market is new, its presence in medicine is far greater.
Medicinal: Pharma’s $934 Billion Target
The medicinal side of cannabis is the fastest-growing sector. Some form of medical cannabis is now legal in more than 30 nations.
It can treat issues such as chemotherapy side effects, migraines and insomnia. Because of its mild side effects, patients and medical professionals favor it over other prescription drugs.
The global pharmaceutical industry is worth $934 billion. Research firm Grand View Research states that cannabis will steal $100 billion of market share by 2025.
Recreational: $1.3 Trillion Opportunity in Alcohol
Canada estimates that about 10% of adults use cannabis on a regular basis, while about 80% of Canadians drink alcohol.
Infused drinks will tap into this broader market.
That’s because cannabis drinks offer huge advantages over alcohol:
- They can be zero calories.
- They don’t cause a hangover.
- And with new technology, drinks can be made in any flavor.
Canopy Growth Corp.’s former CEO, Bruce Linton, saw the recreational cannabis market growing to $200 billion. That’s a small piece of the $1.3 trillion global alcohol industry.
But it creates a huge opportunity for investors like us.
2 Ways You Can Tap Into the $6.4 Trillion Disruption
For a broader approach to the sector, consider an exchange-traded fund (ETF). The Cambria Cannabis ETF (BATS: TOKE) is one of the newest cannabis ETFs to hit the market. When compared to other ETFs, TOKE’s expense ratio is the lowest at just 0.42%.
The ETF will give you exposure to major companies in the cannabis industry. Aurora Cannabis Inc., MediPharm Labs Corp. and Aphria Inc. are some of its top holdings.
The fund trades on the CBOE BZX U.S. Equities Exchange, or BATS. For our purposes, trading a stock listed on BATS is the same as the New York Stock Exchange.
If you want to put your money directly in the most promising cannabis companies, Matt Badiali and I sent readers of the Real Wealth Strategist newsletter our latest pick in the cannabis industry.
The company we recommended is set to become one of the world’s leading producers. It focuses on grabbing market share in wellness, medicinal and recreational markets.
And there’s more where that came from.
Click here to learn more about this fast-growing industry and join us in these trades.
Internal Analyst, Banyan Hill Publishing.
P.S. Check out my YouTube channel. Hit the subscribe button to stay up to speed on the latest marijuana market news.