Cannabis — The Vermont Way

marijuana greenhouse

I recently had the opportunity (as a favor to an old friend) to sit on a panel at Castleton State University in Vermont for the first Castleton Cannabis Conference, an event that was a big hit and is almost certain to be repeated in the years ahead—not least because the keynote speaker was the Lieutenant Governor of Vermont, David Zuckerman, who has been pro-cannabis for years.

The Vermont legislature legalized medical marijuana way back in 2004, but it wasn’t until July 2018 that it became legal in the state to own an ounce of marijuana—and to cultivate two plants. So now thousands of Vermonters are doing just that, while awaiting a regulated and taxed adult-use market.

And hemp, of course, has been legal nationally since December, so plenty of Vermonters are experimenting with growing that, not only for CBD but also for fiber and soil remediation (hemp loves to suck up heavy metals).

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On my panel, which was focused on business, were a hemp grower, two lawyers who specialize in cannabis law, one producer of cannabis-centric media and events and the president of Grassroots Vermont, a medical marijuana dispensary.

On the second panel, which was focused on lifestyle, were a cannabis chef, a representative of the Vermont Cannabis Nurses Association, an herbalist from the Vermont Center for Integrative Medicine, another hemp grower and a maker of artisanal glass pipes.

The audience, mostly adults, was deeply engaged, as they worked to learn how cannabis (both hemp and marijuana) could be incorporated into their lives—legally, profitably and safely.

Among the common concerns were these:

Is it legal to sell CBD in my store if I know tourists are going to take it out of state?

Who can I sell my hemp plants to?

How can I get financing to expand my growing hemp operation as my dairy business shrinks?

How can I use cannabis to treat my migraine headaches?

Can I grow more than two marijuana plants if the others are for someone else?

What’s the best way to avoid mold on my product if I’m storing it for months?

How can I easily test for THC content?

How can I get marijuana for my elderly parents?

If I open a cannabis-friendly bed-and-breakfast or Airbnb, what’s the best way to do it?

What are the prospects for THC testing of drivers?

How do I cook with CBD?

That last question was answered by the entertaining Chef Joe Lewi, a Boston-based executive chef for a chain of movie theaters, who cooked and served—outdoors on a sparkling Vermont day—eggplant caponata accompanied by lemonade and shortbread, all infused with CBD.

And I talked to plenty of attendees about investing.

However, noting that the title of the conference was “Cannabis—the Vermont Way,” it was clear to me that while these Vermonters may put their retirement funds in big, national establishments, like Fidelity and TIAA CREF, they don’t want big outside money coming in and disrupting what could be a thriving Vermont cannabis industry.

You see, Vermont likes being small and independent. Vermont has a very successful artisanal food movement—rooted in maple syrup and cheese—and a thriving craft brewery movement, so it makes sense that Vermonters want to grow their own cannabis industry. And I think they will!

Of course, as an investment advisor, I focus on the big money in the industry—so my presence at the conference wasn’t exactly a big hit. But we all came away better educated about the issues—and as the industry evolves in the years ahead, I’ll be interested to see how Vermont finds its way.

Interestingly, one anecdote from Vermont concerns the health of its medical marijuana dispensaries. According to the president of the dispensary, which is owned by publicly traded iAnthus (ITHUF) (though that fact is not publicized), the advent of the grow-your-own law in Vermont last year marked the beginning of a steady drop in patients as more and more opted for the homegrown route.

How to Invest in Cannabis

If you’re not in Vermont, however, and you want to benefit from the growth of the big money in this fast-growing industry, I do have some concrete suggestions for you, and they’re all available in my Cabot Marijuana Investor advisory, the next issue of which will be published this Thursday, September 26.

Of the 13 stocks in my portfolio, the average growth rate of second-quarter revenues from the year before was 273%. That’s rapid growth!

Equally exciting, three of my portfolio holdings have achieved one of my favorite fundamental milestones, which is accelerating revenue growth.

One major Canadian cannabis company, for example, grew revenues 106% (year-over-year) in the fourth quarter, 616% in the first quarter, and 969% in the second quarter!

Accelerating revenue growth is a very good indicator of higher prices ahead, because analysts are behind the curve; they just can’t revise their estimates fast enough. In short, these three marijuana stocks in particular could do very well!

To learn their names, click here.

Timothy Lutts

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