We are standing on the precipice of a New Year and a new decade. In a way it’s just an arbitrary date on the calendar. But new beginnings hold great promise and are an ideal time to shake off the cobwebs and take a fresh look at things. The coming year holds special promise. And there is a brand new industry just coming of age.
New industries only come along once in a while and they almost always present an array of investments that will become superstars of tomorrow. We dream of going back in time and buying Microsoft (MSFT) or Starbucks (SBUX) or Netflix (NFLX) when they were new, upstart companies. But we might get another bite of a similar apple in 2020.
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This industry is marijuana. I know. It seems like a relic from your youth that’s out of place in a new hot stock sector. The stoner culture and big business seems like an odd match. But it’s no joke. It’s big business. And it promises to be one of the hottest stock market sectors in the New Year and beyond, and good marijuana investments are all around.
The growth in marijuana is undeniable. It is already the most used recreational drug in the world. And usage is growing like crazy. Global marijuana use has grown by 60% over the last decade and more than tenfold in the U.S. in the last 25 years. In fact, the U.S. is the marijuana capital of the world and currently accounts for anywhere from one-third to one-half of global consumption, depending on estimates.
But the industry has been born from a new trend toward legalization. It became legal throughout Canada in 2018. And the drug is now legal for medical use in 33 U.S. states and recreational use in 11 states. There is speculation about legalization nationwide at some point. But regardless of whether that happens or not, the trend toward more legalization is clear and undeniable.
Legal marijuana sales in the U.S. grew at a 32% clip in 2018. Sales are expected to rise by an average of 24% every year between now and 2025. And that’s without any further legalization. With growth like that the market for the product doubles every 3.2 years. Marijuana is a burgeoning industry in its infancy that will undoubtedly produce huge market winners in 2020 and beyond.
The industry is well covered at Cabot by Timothy Lutts in his Cabot Marijuana Investor advisory. Tim is a bona fide marijuana industry expert who has accrued a phenomenal track record investing in the sector since 2017. If you’re looking for great opportunities in the sector you will be very well served by subscribing to Tim’s excellent advisory.
In fact, I’m taking his advice by poaching one of his best marijuana investments. The company is actually a Real Estate Investment Trust (REIT) that takes much less risk than most of the other sector stocks (and is therefore right up my alley as a dividend investor) and benefits from the simple fact that more marijuana will continue to be grown in the years ahead. The company is already making money and earnings continue to grow at a rapid clip. The REIT currently pays an impressive 5.43% yield. But, unlike most REITs, it also offers huge potential price appreciation and dividend growth.
To learn its name, click here.
Editor’s Note: This post was excerpted from the latest issue of Cabot Dividend Investor.
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