At a time when I'm getting advice on which cannabis stocks to buy from everyone, it takes a lot to get me excited about some new company. But this one caught my eye.
Synthetic Marijuana Sidesteps Remaining Regulations
[Alex Koyfman Photo] By [Alex Koyfman](
Written Thursday, June 1, 2017
Years ago, long before cannabis reform swept across the American legislative landscape in a green, pungent, prohibition-busting tsunami, I came across a fact that put the economics of pot into perspective for me.
I didn't read it online or hear it by word of mouth. Instead, the fact came from a sociology professor in my second year of college — taken directly from the textbook he'd written on the socioeconomic implications of drug prohibition in the United States.
It was a simple statistic, readily understandable by anybody, and after I saw it, there was no turning back.
From that point onward, I knew, with the same certainty that I know that gravity is the force keeping my feet bound to the ground, that one day cannabis would become a major, legal economic force across all the jurisdictions where it was then universally forbidden by law.
You see, for decades now, cannabis been the world's #1 cash crop, as measured by the dollar value of the total volume of crops harvested.
At over $300 billion in annual global production, it beats out rice ($220 billion), corn ($130 billion), and wheat ($115 billion) handily.
[cashcrop]
And because it's also by far the world's most lucrative crop to harvest per acre planted, with an average value of $194,000 (coca comes in second at $153,000/acre), cannabis achieves its status as the undisputed king of crops in terms of value, despite being 19th in terms of total acres planted.
It breaks the mold, both when compared to other illicit plants like opium and coca and when compared to anything legal — it's more profitable, more valuable, and, most importantly of all, much, much more popular.
And it's for that reason, above all others, that legalization was inevitable.
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Today, of course, all of that is history.
The tide of cannabis prohibition reform has now gained what appears to be unstoppable momentum, with even traditionally conservative jurisdictions, like my home state of Pennsylvania, embracing medical decriminalization.
In states where full legality has taken hold — Colorado being the prime example — the cannabis industry has blown up with a speed reminiscent only of the dot-com boom of the late 1990s.
Today, according to Business Insider, there are more legal weed dispensaries in Denver than there are corporate coffee franchises.
And across all the legal states, total revenues are rising and expected to continue steadily for years to come.
[potreform]
Nevertheless, despite years of progress, and with revenue from recreational legal cannabis expected to match the budget for medical marijuana as soon as next year, there are still a number of states — including much of the South and the Great Plains — where there are no provisions for decriminalization to speak of.
Texas alone accounts for a market 27 million strong, or roughly 8% of the U.S. population, where the economic impact of prohibition reform has yet to be felt.
Given how long it takes for certain populations to start to change their minds on a legislative level, my guess is that we're still decades away from 100% state participation in the legal cannabis market... unless, of course, all of this is superseded by federal prohibition reform, but the chances of that happening now are shaky at best.
The shortsightedness of these holdouts doesn't make much sense to me as a living, breathing, freethinking citizen, but it's even more frustrating from an investment standpoint.
Federal and state laws restricting not just straightforward tax opportunities associated with recreational marijuana sales, but also scientific research, through which cannabis has already shown great promise in a host of medical applications, represent nothing but lost opportunities.
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Government 101: How To Turn a $53 Billion Cash Cow into a $3.6 Billion Liability
That's to say nothing of the unmitigated waste associated with the prosecution and incarceration of individuals pulled into the criminal justice system for nonviolent violations of these inefficient laws.
According to the New York Times, marijuana prosecution and incarceration costs states a total of $3.6 billion a year (with other estimates varying between $1.2 and $6 billion), despite the fact that Americans and Canadians spend more than $53 billion annually on the substance.
In short, cannabis, sadly, remains a stigmatized plant... and the underlying chemical, THC, remains a controversial and misunderstood molecule.
Which is why a company I came across a few weeks ago sparked my interest.
Cannabis stocks these days are starting to look a lot like dot-com stocks did about 20 years ago.
All are being pushed forward by unstoppable investor mania, and it seems like anybody out there with an idea for the cannabis niche will find willing investors.
Expectations, of course, will be dashed in the end, as only a handful of real companies are likely to emerge once this Wild West phase comes to an end.
I recently found out about a company that I believe will be one of those — and like all standouts, its business model tends to sidestep and disrupt the conventions.
A moment ago I mentioned that state and federal legislation is still behind the times.
While other companies will be forced to wait and endure the uncertainties of ongoing federal prohibition, this company won't have to worry about all that.
Avoid Trouble With the Law... By Avoiding The Law
This company synthesizes its cannabis artificially.
The artificially created THC that this company manufactures will be used in research and development of new medications to combat common and devastating neuropathological diseases like Parkinson's and Alzheimer's, making it a serious player in some of the most important pharmaceutical markets today.
To the human body, its cannabinoids will be indistinguishable from the natural stuff, but because they're not derived directly from the plant, the legal implications that continue to haunt other companies in this sector are simply irrelevant.
It gave me a moment of pause when I heard this on a phone call with the CEO, because if there was one problem stifling this technology, this appeared to be the silver bullet.
At a time when I'm getting advice on which cannabis stocks to buy from bartenders, waiters, and Uber drivers, it takes a lot to get me excited about some new company throwing its hat into this sector.
But this one stood out immediately... so much so that I decided to delve in deeper.
I found that this synthetic THC business model was just the tip of the iceberg.
It warranted a full report, which I recently completed and published to a select group of investors who I knew would be interested in just this sort of opportunity.
To join that group and get the report, [click here.](
Fortune favors the bold,
[alex koyfman Signature]
Alex Koyfman
[[follow basic]@AlexKoyfman on Twitter](
Coming to us from an already impressive career as an independent trader and private investor, Alex's specialty is in the often misunderstood but highly profitable development-stage microcap sector. Focusing on young, aggressive, innovative biotech and technology firms from the U.S. and Canada, Alex has built a track record most Wall Street hedge funders would envy. Alex contributes his thoughts and insights regularly to [Wealth Daily](. To learn more about Alex, [click here](.
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