The Next King of Cannabis

Written by Nick Hodge
Posted November 27, 2019

Ever since I moved to Spokane, the town has been abuzz about the coming Amazon fulfillment center. 

Everyone in town can cite the statistics the local news has rattled off weekly for years:

  • It will be the largest building in eastern Washington

  • It will create 1,500 full-time jobs

  • It’s 2.5 million square feet and cost $181 million to build

One of my neighbors headed up a utility project to run underground power to the warehouse. Another guy I know helped pour the concrete. 

It’s been a regional stimulus. Bezos even donated $5 million to Spokane charities this week. 

You know the story of Amazon’s business and stock success. 

Shares have gone up a scant 100,000% in the past two decades, making the record-setting S&P not even appear on the chart.

Amazon 20 yer stock chart

There’s another sector that’s building out infrastructure like this… giant buildings that are changing entire towns. And it only has a fraction of the value of Amazon, for now.

It’s weed. And depending on which numbers you believe, it’s poised to grow from a ~$10 billion industry last year to a ~$100 billion industry by the mid 2020s. 

Right now, though, the cannabis industry is in turmoil. The 2,000%-3,000% gains of the past two years have now been erased very quickly. Many got rich. More got suckered in. 

WEED Canopy 5-year Chart

I know. I’m the publisher of the newsletter writer who was the very first to be let through the doors of what became Canopy Growth: Jimmy Mengel. He did that back in 2013. 

His readers got in Canopy at $1.60. It went to over $75 before giving it all back. 

The cannabis stock bubble has burst, but the industry is still alive and well. It continues to gain acceptance among the masses and the list of states and counties that are legalizing continues to grow. 

As the new decade unfolds, so will Cannabis 2.0. But as Jimmy just told me:

It remains the biggest win of my career and the most profitable recommendation I’ve ever made...

But unfortunately... Canopy isn’t going to be the cannabis company to take us to the next round of growth.

It's jettisoned its founder, diluted shares, and like any large company, won’t be growing at a large enough scale to make a difference for investors.

Those were his words upon returning from a trip to what he is calling “the next king of cannabis.” 

It’s rapidly adapted to changing market conditions, pivoting to edibles and beverages faster than the former cannabis market darlings. 

It’s building out one million square feet of grow space and is growing plants with an unmatched level of technological sophistication. 

And it’s hired hundreds, if not thousands, of employees in its quest to deliver the highest greenhouse yields in the industry and drive down costs — transforming towns along the way just like Amazon is doing in Spokane. 

Jimmy said he hasn’t seen anything like it since he toured Canopy Growth. And the timing is perfect considering the recent sell-off that’s occurred. 

Make way for the next king of cannabis. 

Happy Thanksgiving Eve.

Call it like you see it,

Nick Hodge Signature

Nick Hodge

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Nick is the founder and president of the Outsider Club, and the investment director of the thousands-strong stock advisories, Early Advantage and Wall Street's Underground Profits. He also heads Nick’s Notebook, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.

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Investing in Marijuana Without Getting Burned