The No. 1 Pot Stock in America Profit Guide

The cannabis industry is still very much like the Wild West.

Many of the companies that investors know today are run by what you might call “cowboy CEOs.”

These leaders are more likely to wear jeans and sport coats over graphic T-shirts than suits and ties.

I’m reminded of the saying from venture capitalist Peter Theil, “Never invest in a tech CEO who wears a suit.”

In recent months, we’ve seen a spate of cannabis CEOs stepping down or being replaced. As these companies grow into international darlings, there’s need for new, more experienced leadership.

There’s a running joke that time in the marijuana business is tracked in dog years, meaning a day in the cannabis industry is akin to a week – or sometimes a month – in the rest of the business world.

Change is a constant. And it’s fast-paced. We are seeing some changes at the top echelons of the marijuana business – new CEOs, management shake-ups and refocused business plans – because that is what’s needed to get these companies to the next level.

There are new markets, new products and new regulations, as well as tweaks to old ones, mergers and acquisitions, and a flurry of expansions.

It sometimes feels like trying to drink from a fire hose.

But it’s this rapid evolution that makes the marijuana industry so powerful as a wealth builder. It also forces those of us who cover the industry to constantly update our forecasts and views.

Back in 2017, I made a bold prediction.

I told investors the global cannabis industry would reach $200 billion by 2030, increasing 1,300% from 2016 to 2030.

Some scoffed… and not without reason.

At the time, only one country had legalized marijuana at the federal level. And in the U.S., many of the markets in states that had passed recreational weed or medical marijuana in 2016 hadn’t gone live yet. Not to mention, the 2018 Farm Bill (which legalized the production of hemp) wasn’t on anyone’s mind.

Of course, it’s a different world now. And my $200 billion projection appears conservative.

Former Canopy Growth CEO Bruce Linton predicted a $500 billion global market. Some of the guests on my popular video segment CannaBiz Now! have shared projections of $1 trillion.

So my $200 billion forecast – now three years old and initially an outlier – is suddenly too small. And that’s because a lot has changed in the industry… but so has my view of a market that I initially steered clear of.

The New $200 Billion Frontier

When I started recommending pot stocks to investors, I focused primarily on Canadian companies.

Our neighbor to the north was the first country to legalize medical marijuana. It was also the first G-7 country to legalize adult-use marijuana at the federal level in 2018.

But the attraction didn’t stop there. The country also cleared the path for pot producers to export internationally. As more countries started to legalize marijuana or decriminalize recreational use, Canada rushed to meet the growing demand.

This made Canada’s cannabis companies must-owns.

Initially, I viewed the U.S. market as limited and fragmented. Former Attorney General Jeff Sessions was a major obstacle and a very real danger to the future of cannabis.

But now Sessions is gone and a bevy of new states have joined the green movement.

There’s also a new type of cannabis company taking center stage: the multistate operator (MSO). These are pot companies licensed to operate in a number of different states.

The U.S. market is rife with opportunity, particularly since California – with the fifth-largest economy in the world – launched adult-use sales in January 2018.

Last year, the North American cannabis market grew 30% to more than $13.9 billion.

Of that total, Canada accounted for $1.7 billion. The rest came from the United States. And a third of that was from California.

Today, 33 states and Washington, D.C., have legalized medical marijuana. Another 11 states plus Washington, D.C., have given the green light to adult-use cannabis. And 24 states plus Washington, D.C., have decriminalized possession of small amounts of pot.

Over the past several years, legislators have made real headway in cannabis legalization.

Currently more than 60% of Americans live in a state where marijuana in some form is legal. On top of that, 20% of U.S. citizens live in a state where adult-use marijuana is approved.

We’re close to the tipping point. I believe there will be a change at the federal level in the next couple of years. And the market will explode.

Already, the legal U.S. pot market is expected to grow at a compound annual growth rate of 28%.

Within the next decade, this market is projected to hit $80 billion. That’s eight times the size of the Canadian cannabis market.

And then you need to consider the combined $140 billion-plus opportunity in infused beer, wine, spirits and coffee… or the $22 billion hemp-derived cannabidiol (CBD) market.

And there’s one trailblazer with its fingers in all these pieces of the pie…

The No. 1 U.S. Pot Stock to Own

MedMen Enterprises (OTC: MMNFF) is a thoroughbred in the new breed of American MSO cannabis companies.

As more states have legalized cannabis, this intuitive business model is gaining popularity.

But with its first-mover advantage, MedMen is way ahead of most of the competition. And right now, it’s the best value in the industry.

MedMen is one of the biggest MSOs in the cannabis industry with 33 stores across nine states.

Currently MedMen is licensed for 86 retail stores in a dozen states. Although the company’s expansion plans are on hold due to the Coronavirus pandemic, approximately half of the U.S. population’s marijuana needs are addressable by MedMen if it ends up opening all its licensed stores.

Its dispensaries are clean and modern, packed with its main brand, Statemade.

Aside from its MSO status, MedMen is a vertically integrated cannabis company, meaning it controls everything from seed to sale.

Its 45,000-square-foot Mustang facility in Nevada can produce 10,000 pounds of cannabis per year.

And that’s just one of several state-of-the-art facilities it owns in Arizona, California, Florida, Nevada and New York.

This helps the company’s gross margins remain attractive, above 50%.

With the legal U.S. pot market set to explode, MedMen is poised to reap the benefits.

Needless to say, there’s a lot of upside for MedMen shares.

But here’s the really exciting number to know about MedMen… Prior to the COVID-19 outbreak, Medmen averaged $6,541 in sales per square foot of retail space.

That’s more than Starbucks, Tiffany & Co. and Apple average per square foot in their stores. And its average customer spends $80 per visit.

In fact, because of stylish shops and high sales volume, you should think of MedMen as the “Apple of weed.”

I believe its California dispensaries could generate $20 million per year in revenue once the economy opens up. And as an MSO, it can expand across the U.S. in step with legalization.

All of this sets the stage for enormous potential gains in the years to come.

Medmen trades on the over-the-counter (OTC) market.

Although the OTC is not an official exchange, the process of purchasing stocks on it is no different from how you purchase stocks on the New York Stock Exchange and the Nasdaq. Simply enter the symbol into your online brokerage account, and the current price and other company information will appear.

Action to Take: Buy shares of  MedMen Enterprises (OTC: MMNFF) at market. Use a 35% trailing stop to protect yourself. Make sure this position doesn’t account for more than 4% of your entire portfolio.