Doug Casey on the “Green Gold” Rush

Doug Casey on the “Green Gold” Rush

Widespread marijuana prohibition is coming to an end. This fact has long been inevitable. Now it’s imminent.

Millionaires and billionaires will come out of this…

Longtime readers know that Doug Casey and I (Nick Giambruno) are expert “crisis investors.” We fly around the world chasing turmoil and the profitable opportunities it creates.

Doug and I spend much of our time in the world’s most obscure and violent places. More often than not, that’s where we find the worst crises—and the best fortune-building opportunities for our subscribers.

But we recently found a once-in-a-generation opportunity in a slightly less exotic place… Canada.

Canada is at the forefront of the enormous global cannabis market.

At first, marijuana stocks might not seem like a classic crisis investment. The industry isn’t coming out of a brutal bear market or downturn. Instead, it’s in the early innings of a mega bull market.

However, crisis investing is also about taking advantage of politically caused distortions in the marketplace. And it’s about profiting from aberrations of mass psychology.

This is what we’re doing with the legal marijuana market.

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The reality is, the marijuana market has been in one long crisis since the ’30s. This is when the US government prohibited it at the federal level.

President Nixon turbocharged the crisis when he started the “War on Drugs” in the 1970s.

This pointless war has killed an untold number of people. It’s put millions behind bars, even though they never hurt or threatened other people or their property.

It’s even ravaged entire countries. Just look at the horror it’s inflicted in places like Mexico and Colombia, where it’s killed hundreds of thousands of people.

Thankfully, this bloody war is almost over.

Right now, leaders around the world are rethinking marijuana prohibition. Many longtime “drug warriors” are even changing their tune on marijuana.

The “War on Drugs” has pushed hundreds of billions of dollars in marijuana profits underground.

Today, this industry is like Mount St. Helens right before an eruption. Soon, billions of dollars will explode from the underground market and flow into legitimate businesses.

The United Nations estimates it to be worth around $150 billion annually. I think that’s conservative.

To put that figure in perspective, only $17 billion worth of silver was produced in 2016. So the silver market is about 1/10th the size of the marijuana market.

The marijuana market is also bigger than the iron, copper, aluminum, coffee, corn, and wheat markets.

Until now, almost all of these hundreds of billions of dollars were off-limits to people like you. But that’s about to change.

The end of marijuana prohibition means we can profit off marijuana without risking jail time.

Marijuana millionaires and billionaires will come out of this. But you don’t have to work in the industry to make a fortune.

Everyday investors can get rich off the marijuana boom, too.

For more on this, I turned to Doug Casey. You’ll find our conversation below.

Nick Giambruno: Doug, I think cannabis will become a mainstream big business over the next few years. Legitimate companies are already working to commercialize this useful plant in various ways. What’s your take?

Doug Casey: I completely agree. Pot has been proven to have huge medical applications. I think there’s going to be a big recreational market too, at least the size of that for alcohol. And industrial applications for hemp, as a substitute for cotton in fabrics and wood pulp in paper, are gigantic. In fact, these applications will eventually dwarf other uses for hemp.

Nick Giambruno: Have you invested in the space?

Doug Casey: So far I’ve invested in two private cannabis companies that are going to go public.

I bought 500,000 shares of one, a couple of years ago, at a dime per share. I rarely put money in private start-ups—70% of the time they go to zero. In its last round, however, this company privately raised money at $2.25 per share. It looks like they’re going to bring it public at around $4, and if the market’s hot it will go to $10. Potentially a big hit. It has the potential to be a 100-bagger. You need one of those occasionally to compensate for the inevitable losses of putting money in private companies where you’re a minority shareholder.

At that point, I’ll have to figure out whether it’s a real business or just a fortunate speculation. But the big gains in cannabis stocks are still ahead of us. Most of the public companies are still far too small for institutional investors. The big money has yet to participate.

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Nick Giambruno: That’s just a taste of the profit potential in this space. Of course, all of these lucrative profits used to be underground.

Doug Casey: I have a number of friends from the 60’s and 70’s who made it big in the pot, coke, and psychedelic trade. The penalties were minimal in those days, the narcs were few and inexperienced, and competition was light. Hippy entrepreneurs of the day tended to get into either drugs or computers.

Nick Giambruno: Medical marijuana has already been approved in 29 states (plus Washington, DC). And eight states (plus DC) have approved recreational use.

Recreational marijuana is legal in Colorado, where you live part of the year, Doug. What have you seen?

Doug Casey: I live in Aspen during the northern summer. The little town has at least five pot shops. They’re all coining money. Their big problem is the banks won’t accept their cash deposits, for fear of getting crosswise with the feds.

From what I can tell in Colorado there’s much less abuse than there was in the old days. I also spend a lot of time in Uruguay where it’s legal, and Canada where it’s practically legal. Legalization has—perhaps counterintuitively, and surprisingly to many—radically reduced abuse in those jurisdictions as well. Legalization makes sense in every way, and the trend is going to spread worldwide.

Nick Giambruno: The US government still classifies marijuana as a Schedule 1 drug. In other words, the feds consider marijuana as dangerous as cocaine or meth.

That’s completely absurd.

The good news is this ridiculous policy probably won’t last much longer. States are too hungry for the tax money.

Bankrupt states like Illinois are desperate for every penny they can extract from the milk cows that live in their fields.

The economic benefits of legalization are simply too good to pass up.

Of course, many people worry the Trump administration will shut down the industry. And there’s good reason to be nervous.

I’m sure you remember when Trump’s attorney general infamously called marijuana “slightly less awful” than heroin.

Comments like this have kept a lot of people from investing in marijuana.

What’s your take?

Doug Casey: Well, let me preface this by saying Sessions was a disastrous choice for Attorney General. He’s done nothing in his life but act as a prosecutor, and a politician. He has no experience—and therefore probably no inclination or even ability—to produce things of tangible value.

But we almost always get undesirables as the AG. They’re hatchet men, meant to prosecute “the enemy,” taking their pick of the hundreds of thousands of laws and regulations on the books to do so. Look at some of the recent AGs—Loretta Lynch, Eric Holder, Alberto Gonzales, John Ashcroft, Janet Reno. All of them would have been willing and obedient lapdogs to Stalin or Beria. A certain personality type is suited for the job.

Sessions is a rabid drug warrior, even against something as useful and benign as hemp, or marijuana. He’s a busybody who feels no guilt or remorse at enforcing laws that have destroyed the lives of tens of millions. I don't know if he's stupid, bent, thoughtless, paranoid or what his problem might be. Maybe he’s afraid that if pot wasn’t illegal he’d become a dope fiend himself. But the proper direction, the objective, is to legalize all drugs. Not amp the drug war up another notch, as he wants to do.

Nick Giambruno: Fortunately, we can make money in the industry no matter what the US government does.

Right now, the best way is to invest in Canada. It’s at the forefront of the legal marijuana market.

What about publicly traded companies that we can access in our brokerage accounts?

Doug Casey: There are dozens of marijuana companies out there already. A bunch more will come public. The marijuana market is going to get hot—notwithstanding my bearishness on the economy and stocks in general.

Editor’s Note: Doug Casey recently made a million bucks on an underground pot deal. What did he do?  More importantly: how can you join the party? Here’s the whole story…

Nick Giambruno

Nick is Doug Casey’s globetrotting companion and is the Senior Editor of Casey Research’s International Man. He writes about economics, offshore banking, second passports, value investing in crisis markets, geopolitics, and surviving a financial collapse, among other topics. He is a CFA charterholder. In short, Nick’s work helps people make the most of their personal freedom and financial opportunity around the world. To get his free video crash course, click here.

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