Buy Pot Now, Thank Me Later

Dear Reader,

I usually don’t do this…

But I’m going to make a bold prediction…

The time to buy weed is right now.

There are three reasons why.

First, it’s a historic week for cannabis.

The Senate just passed the Secure and Fair Enforcement Regulation (SAFER) Banking Act.

It’s a big deal because the previous iteration of the bill, the Secure and Fair Enforcement (SAFE) Act, passed the House multiple times but never the Senate.

This time, the amended SAFER Act started in the Senate, passed, and is expected to easily pass the House.

A bit confusing, I know.

But the important part is that once the SAFER Act is signed into law, it’ll be a boon for all things marijuana.

According to the Senate, "The Secure and Fair Enforcement Regulation (SAFER) Banking Act would ensure that all businesses — including state-sanctioned cannabis businesses — have access to deposit accounts, insurance and other financial services. The legislation also creates common-sense standards for banks and credit unions to maintain customer relationships and to expand access to deposit accounts for underbanked groups.”

Essentially, this bill will open up more access to capital and credit, which should bring more money into an industry that operates on razor-thin margins. 

The Senate writes, “By shifting these businesses and their employees away from cash-reliant businesses and into the financial mainstream, this bill helps to promote public safety for the communities in which these businesses operate.”

This will also open up mortgages to business owners.

This brings me to the second reason to buy pot now…

Its impending reclassification.

Right now pot is scheduled as an illegal drug under the Controlled Substances Act even though 47 states have already legalized weed in some form, whether medical or recreational.

Its Schedule I classification puts it in the same category as heroin, LSD, and ecstasy.

Once the SAFER Act passes, reclassification is only a stone’s throw away.

This will open the floodgates to institutional investors who’ve been sitting on the sidelines.

According to Key Investment Partners, less than 2% of pot stocks are owned by institutions.

Until weed is federally legalized or rescheduled, institutions won’t touch the stocks.

There's support from the White House on this, too…

When President Biden took office in January 2021, he made a lot of big promises.

One of those promises, which can still be found on his campaign website, was to decriminalize cannabis use at the federal level:

Biden will work with Congress to reform federal sentencing and provide incentives to state and local systems to do the same. He will end, once and for all, the federal crack and powder cocaine disparity, decriminalize the use of cannabis and automatically expunge all prior cannabis use convictions, and end all incarceration for drug use alone and instead divert individuals to drug courts and treatment.

He also said he wanted to reschedule the plant and expunge sentences for those convicted of federal possession of marijuana.

And for the most part, he’s made headway on those promises, something cannabis advocates have cheered.

A year ago this month, Biden announced a sweeping pardon for those with possession charges.

Finally, the third reason to buy weed now is that pot stocks are near all-time lows.

After the Senate passed the SAFER Act last week, pot stocks sold off across the board.

It’s a “sell on the news” scenario.

And it's only getting worse, for now…

Tilray (NASDAQ: TLRY), one of the biggest players in the space right now, is down nearly 18% year to date.

Innovative Industrial Properties (NYSE: IIPR), the only marijuana real estate investment trust, is down 16% year to date.

Canopy Growth Corp. (NASDAQ: CGC) is down a whopping 73%.

And a prominent exchange-traded fund (ETF) that tracks the industry, the AdvisorShares Pure Cannabis ETF (NYSE: YOLO), is down 23% year to date.

From a pure chart perspective, it looks like there's blood in the streets.

Now, there are macroeconomic factors bringing the entire market down as well.

But the contrarian in me says to buy now.

And even though there’s little institutional investment right now, the smart money is thinking the same thing.

We're seeing a lot of money moving into the space.

That includes what I call the super-traders of the world, including our very own lawmakers and company insiders like C-suite executives.

Check this out…

Doing a quick search on CapitolTrades — a site that tracks congressional stock buying — I found that House Democrat John Yarmuth bought $30,000 worth of Cronos, House Republican Brian Mast bought Tilray, and House Republican Chris Jacobs bought Innovative Industrial Properties…

Digging deeper, I found pot insiders buying their own companies.

Village Farms International CEO Michael DeGiglio bought 10 million shares; the CFO, COO, and CEO of Corbus Pharmaceuticals all bought over 500,000 shares; Hydrofarm Holdings CEO and Chairman William Toler bought over 5 million shares; a director at Cronos bought millions of shares; and Innovative Industrial Properties Executive Chairman Alan Gold bought over 400,000 shares.

This looks like a clear sign that something big is coming.

Now, keep in mind that all of these companies are extremely speculative.

Some could even go out of business.

But it seems unlikely that so much money is flowing into these companies without a catalyst on the horizon.

Does this mean something big like federal legalization is coming for the industry soon?

This time next year will be very interesting, indeed.

To recap, with the SAFER Act potentially becoming law soon, the inevitable reclassification of marijuana, pot stocks at all-time lows, and insider money flowing in, it could be a once-in-a-lifetime opportunity to play a potential massive bull run. 

That's all I have for you today, but I delve deeper into the subject on the latest episode of the Angel Research Podcast.

I talk about some upcoming "trading treasures" including psilocybin stocks, gold bullion being sold at your local Costco, new developments on congressional insider trading, and the future of air travel.

Check it out right here.

Stay frosty,

Alexander Boulden
Editor, Wealth Daily

Check us out on YouTube!

After Alexander’s passion for economics and investing drew him to one of the largest financial publishers in the world, where he rubbed elbows with former Chicago Board Options Exchange floor traders, Wall Street hedge fund managers, and International Monetary Fund analysts, he decided to take up the pen and guide others through this new age of investing.

Alexander is the investment director of Insider Stakeout — a weekly investment advisory service dedicated to tracking the smartest money on the planet so that his readers can achieve life-altering, market-beating returns. He also serves at the managing editor for R.I.C.H. Report, a comprehensive service that uses the highest-quality investment research and strategies that guides its members in growing their wealth on top of preserving it.

Check out his editor’s page here.

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