Marijuana-lucrative investment idea of next decade - The Daily Reckoning

Marijuana-lucrative investment idea of next decade

Aug 14, 2014

Ouzilly, France

    "I wanna be a billionaire so f**king bad."

    Bruno Mars

Dear Diary,

Yesterday, the Dow rose 91 points. But the markets are generally sluggish. It is the vacation period. People have better things to do than watch Bloomberg terminals and bet on stocks. So, let us turn our attention to other things too. Specifically...

How to get a share of the pot!

"Would you like to make a billion dollars?" begins an email from a friend. He was completely serious.

"I don't know if you've been following the development of the medical marijuana business in Colorado, California, Washington and elsewhere, but this much is clear - it is fantastically lucrative."

Recently, at a party, a friend took a joint out of his pocket, lit up, and passed it around. Imagine our surprise! We had not seen marijuana in use since 1969.

We looked forward to taking a deep toke...filling our lungs...and reliving those happy times. (Would someone put 'Sympathy for the Devil' on the record player, please...) But the joint never made it to us. It went up in smoke, bogarted by our friends.

--- Advertisement ---
Stock Market's "Hidden Treasures"...

Did you know that there are some stocks which have consistently delivered double and even triple returns over the years for a select group of investors?

We like to call them "The Hidden Treasures of the stock market".

And these "Hidden Treasures" have already delivered returns like 100% in 1 year 8 months, 177% in 2 years, 288% in 2 years and 5 months and so on...

Today, we'd like you to know more about such stocks as well!

Click here to get full information on these "Hidden Treasures"...

The resurfacing of marijuana in middle class settings, and our own juvenile reaction to it, made us wonder: are baby boomers getting younger? If so, maybe investing in the medical marijuana business is a good idea. Our friend thinks so.

And he's not the only one. Only a few months ago, another friend offered us the opportunity to invest in a similar marijuana venture in Canada. We declined. Alas...we may never make it to billionaire status!

Marijuana, the story goes, will soon be made widely available for people who need it. And to those who don't. Especially the baby boomers. They are the target audience. They have no fear of the weed...and they have plenty of aches, pains, and anxieties that it might help.

There is some research suggesting that smoking too much pot when you are young may stunt your intellectual or emotional growth. It may harm your career or your family life. But for the baby boomers these things pose no threat. They've already made a mess of their careers and families. Now, they have to live among the debris...with few responsibilities and lots of time on their hands. Many think pot helps.

Could pot help their finances get high too? At first, we dismissed the possibility. Marijuana is too easy to grow. It will be cheap and readily available to everyone. Profit margins will be narrow, with no 'moat' to keep out new competitors.

But the cronies are not so dumb.

If marijuana were simply legalized, prices would probably be abundant...and profits few. That may be the real reason it is has not been made legal already. There was no profit in it. The dealers...the police...the prisons...all colluded to keep it illegal. But what if, instead of legalizing it, you could turn it into a state-sponsored monopoly, like state lotteries? Licenses could be issued to cronies who contribute to political campaigns. Only a few carefully-monitored growers would be permitted...distribution would be tightly controlled...and competition would be prohibited. Then, there would be fat profit margins to divvy up.

Our friend comments: "we have a friend working in the state legislature. He just happens to be intimately involved in the governor's initiative to legalize medical marijuana.

"We have made substantial investments in political contacts in [the state capitol]." The fruit of these investments, he goes on to say, will be an explicit licensing system, giving a few well-connected players what amounts to monopoly franchises in the pot space.

Even in the weed space...the fix is in.

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

Disclaimer: The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

Recent Articles

Can You Teach a Chicken to Dance? February 21, 2019
Vern Gowdie talks about the the classic 'click and treat' technique.
Why Minimum Balance Charges of Govt Banks Have Gone Up Over the Years February 20, 2019
This proves all over again that there is no free lunch in economics.
Here is Some Banking 101 for RBI Governor Shaktikanta Das February 19, 2019
The RBI governor is scheduled to meet banks and ask them to lower interest rates.
Are the Banks Reigniting the Crypto Bull Market February 19, 2019
Selva Freigedo talks about how blockchain technology will open up a new world of opportunities.

Equitymaster requests your view! Post a comment on "Marijuana-lucrative investment idea of next decade". Click here!