Investing in the cannabis industry is different from almost any other type of investment you’ll make. Because marijuana is still illegal at the federal level in the United States, pot companies have extremely limited access to the banking industry, which severely restricts the amount of capital they can raise to grow their businesses. This has forced cannabis companies to go public too early to raise the money they need to grow.
Most publicly traded pot companies are still in their growth stages. Growth-stage companies typically don’t focus on profits. But you want to know who does focus on profits? Investors. And as a result, marijuana stocks have been getting hammered this year. But that doesn’t mean pot stocks aren’t worth investing in.
In 2018, Barclays estimated the size of the global marijuana market to be about $150 billion. Earlier this year, Barclays said the U.S. marijuana market would instantly be worth $28 million once the federal government legalized pot. And it could grow to $41 billion by 2028. (Recreational marijuana is currently legal in 11 states and Washington, D.C.)
Add all of that up and it means the marijuana industry is still worth investing in. The key is adjusting your timeline for profit and finding the right investment vehicle.
This leads us to our first pick.
Meet a Cannabis REIT
Real estate investment trusts (REITs) are companies that own, operate or finance income-making real estate.
Similar to a mutual fund, REITs give investors a chance to own real estate and collect dividend-based income.
A typical REIT owns malls, apartments or other commercial buildings.
Innovative Industrial Properties Inc. (NYSE: IIPR) is a pioneering REIT with a laser focus on the cannabis industry. This is the first publicly traded company that’s providing real estate capital to the medical cannabis industry.
Stockholders are also treated to dividends that must equal at least 90% of the company’s taxable income.
There is a massive amount of momentum behind state legalization of medical-use cannabis in the U.S. And Innovative Industrial Properties has already developed partnerships with leading medical-use cannabis growers in regulation-friendly states.
Medicinal cannabis is already being used legally to treat cancer, glaucoma, HIV/AIDS, wasting syndrome, pain, nausea, seizures, muscle spasms, multiple sclerosis, post-traumatic stress disorder, migraines, arthritis, Parkinson’s disease, Alzheimer’s disease, lupus, spinal cord injuries and other ailments…
And because Innovative Industrial Properties deals directly with just real estate… and not marijuana… it is one of the few American cannabis firms that’s currently publicly traded on a major exchange.
The Party Planner With an IPO
If you can’t find it online, does it even exist?
With the migration of all things toward digital, even a simple party needs a website.
Enter the leader in online event management and ticketing.
Eventbrite (NYSE: EB) helps people browse, create, share and promote local events around the world.
From music festivals and marathons… to conferences and community events… people around the world use Eventbrite to build events and get-togethers.
No small part of the success of the company is due to its simple interface. Setting up an account and sharing events can be done in mere minutes… and it can be as customizable as your imagination allows.
Eventbrite makes money by charging fees for tickets sold to events. These service fees vary by package, ranging from 2% of the ticket price and $0.79 per ticket sold for its essentials package to 3.5% of the ticket price and $1.59 per ticket sold for its professional package. The fees for its premium package are customized.
If your event is free, though, there are no fees… which is a great way to let people test the service and discover just how easy it is to use. And people are definitely using it to sell tickets…
Net revenue growth was up 51% from 2016 to 2017. And it increased another 45% from 2017 to 2018. And in 2018, paid tickets grew to 97.3 million. That’s a 36.9% increase from 71.0 million in 2017.
Eventbrite has honed in on what it calls the “experience economy.” And there’s good reason to think this slice of the economy has a lot of room for growth.
There is an ever-increasing demand for live experiences. Consumer trends and technology are helping to usher in this desire… And that tailwind will only help push more to participate and create events in the experience economy.
Eventbrite is also adding new capabilities to better serve other countries. It is expanding its reach by localizing its platform… This means adding new capabilities, payment options and supporting local tax systems to scale up in new markets.
The best part is that Eventbrite is currently trading at a deep discount after missing quarterly revenue projections. The company has been struggling to integrate Ticketfly into its operations. That integration is expected to be complete by the end of the year. Once that’s complete, we expect this company’s revenue to quickly accelerate. Which is why Eventbrite has moonshot gains written all over it.
Finding a Creditable Coin
Here at Early Investing, we pride ourselves on getting to the party… well, early. And getting into cryptocurrencies well before the big boom in 2017 was worth celebrating. But it’s definitely not too late to get in. In fact, bitcoin bounced back from a disappointing 2018 and is currently trading at around $9,000. And with the bitcoin halving coming up next year, it’s a good time to buy. Previous bitcoin halvings triggered extended bull markets.
While bitcoin usually grabs all the headlines, there are now more than 2,400 cryptocurrencies being traded. But with a market that saturated, unsurprisingly, a large number of them are next to worthless.
Finding good altcoins to invest in (altcoins are essentially just cryptocurrencies other than bitcoin) requires a lot of research. Good opportunities are out there. But you have to be really crypto-savvy.
Plus, altcoins are bought and sold on a variety of “exchanges” that are crypto only… meaning that they don’t accept traditional U.S. currency (or fiat money).
That’s why bitcoin is still king. It is the reserve currency of the cryptocurrency market, which is why you need to buy some bitcoin in order to get started with crypto investing.
Bitcoin can be an intimidating market to enter… but you don’t have to start with that much.
The smallest fraction you can currently purchase is 0.00000001 of a bitcoin. This is called a “satoshi” in honor of the inventor of bitcoin.
Buying just a fraction of bitcoin opens up a whole world of investing options.
Here’s how.
While there are scores of exchanges out there, here at Early Investing, we recommend starting by opening up two accounts.
Coinbase is our favorite to begin purchasing bitcoin with. It’s simple, safe and very secure. You just need to link your Coinbase account to a bank account, debit card or credit card to begin purchasing bitcoin.
Once you purchase bitcoin with dollars (or your local currency), things are much easier.
When you get your hands on some bitcoin, we recommend setting up an account on Bittrex.
Again, establishing a Bittrex account is very simple, safe and secure, and it shouldn’t take more than a couple of minutes. The reason behind opening up the second account is to access a wider array of altcoins that you can purchase with your bitcoin.
With these three investments in place, you’ll be well on your way to outpacing traditional 10% returns and poised to grow your investment by double, triple or maybe even 10 times that figure.
Aiming for a moonshot – an investment that is 10 times better than average – is 100% worth it. But it shouldn’t be 100% harder. Once you get started, we’re sure you’ll see just how easy it can be.
Good investing,
The Early Investing Research Team
P.S. Don’t buy bitcoin until you see this.
Digital currency trader shows how he got in on…
- Bitcoin at less than $84… before it went to $10,000
- Ethereum at less than $9.70… before it went to $1,000
- “Smart Contract Crypto” at $1.50… before it went to $47
- And a third tiny digital currency at $0.185… before his position increased by 3,143%
He reveals his trading secrets here… including how a small investment today could turn into a bundle in the future.