Are You Swimming With Sharks?

Yesterday we brought you Part One of cannabis stocks expert Jimmy Mengel’s interview with the Investing After Hours podcast with Alexandra Perry. Today he’s laying out the argument for U.S. cannabis investing and why the U.S. will soon see a groundswell of legalization efforts. He also discusses the red flags you should be aware of before investing a penny into upstart marijuana compan Are You Swimming With Sharks? [Nick Hodge Photo] By [Nick Hodge]( Written Friday, July 7, 2017 Yesterday we brought you [Part One]( of cannabis stocks expert Jimmy Mengel’s interview with the Investing After Hours podcast with Alexandra Perry. Today he’s laying out the argument for U.S. cannabis investing and why the U.S. will soon see a groundswell of legalization efforts. He also discusses the red flags you should be aware of before investing a penny into upstart marijuana companies. If you have ever invested in the marijuana space, or are on the fence about how to do so, you really need to hear what he has to say. Time is of the essence and you do not want to look back and regret not getting into this sector. It's going to be bigger than you could ever imagine... He even throws in a couple of companies that you can invest in starting today. To your wealth, [Nick Hodge Signature] Nick Hodge Founder, Outsider Club Advertisement [Streaming Your Way to 4,265% Pot Profits]( Royal Gold was one of the first companies to use the “streaming model.” It would lend producers money in exchange for gold. Now the first company to do this in the cannabis space has just IPO'd. We think similar 4,265% profits could be in store for investors who act now. [Full details here.]( Alexandra Perry: You’ve already talked about the huge cannabis boom in Canada. Do you think the same thing will happen for the United States? Do you worry that legalization is on the cutting block with recent policy changes? Jimmy Mengel: Yeah. It's a good question, and I think there's a few things to boil down there. For one, there's not a ton of U.S. companies trading in the United States. There's only maybe one or two that actually trade on major exchanges, and politics comes into that for sure, because cannabis is still a schedule one drug. That means it's on the same level of LSD, cocaine, pretty much labeled as no medical use. It means that even in places like Colorado or Oregon, where they have perfectly legal states' right to sell and distribute cannabis, the Feds could potentially come in and shut down their whole operation. That makes it very tough for them to get bank loans. A lot of the companies have to deal solely in cash, and they have the Fed breathing down their neck, which is obviously a problem. I don't think that's going to continue to be a problem for a couple of reasons. When Donald Trump was elected president, it seemed like he was going to be pretty hands off on the marijuana issue. He said during the campaign a few different times, for one, it's a states' rights issue. We're not going to come busting down your doors. For two, he came out firmly in favor of medical marijuana, and even talked about some people he knew that were using medical marijuana. That was all good. Going into the election, I was like, okay, Trump is not going to bother with this stuff at all. Not to mention, he wants to make money, and there's been no better driver of American jobs and tax revenue than legal cannabis. It's not even close. There's no new industries doing that. The issue was he tapped Jeff Sessions as his Attorney General, who is a notorious anti-drug legislator. That gave a chilling effect on the industry as well. He said before that good people don't smoke marijuana. He even more hilariously said, "I thought the KKK was all right, until I heard that they smoked weed." So, there are plenty of problems there, and obviously he’s not the person you want to lead that branch of the government if you're concerned about marijuana investing. However, he's pretty embattled, and I'm not even sure he's going to make it as Attorney General for much longer. But more interestingly, one of Donald Trump’s closest advisors and a consultant to his campaign is a man named Roger Stone. Just this month he announced the United States Cannabis Coalition, which is an advocacy group comprised of Democrats and Republicans, a total bipartisan team, that are going to go forth and lobby for pro-legalization measures. Alexandra Perry: I mean imagine all the money that's flowing into the cannabis underground market that could be legally taxed. I could see that being the main incentive for the United States government. Jimmy Mengel: Absolutely, and definitely if you're taking it by a state-by-state issue. For example, once California’s recreational sales start hitting, they're forecasted to bring in over a billion dollars a year in tax revenue. As you see more states that are facing budget shortfalls, it's pretty much a no-brainer. If you want to bring in jobs, you want to bring in tax revenue, there is very little to keep you from wanting to legalize marijuana. Advertisement How Kazakhstan Is Making Millionaires in South Texas]( On January 10th, 2017 — Kazakhstan quietly announced a major policy shift. If you don’t live and breathe the energy markets — you likely never heard about it. It’s kicked off a financial chain reaction that could leave investors with a 11,650% windfall. The window for you to take action on this opportunity is rapidly closing. [Get all the details immediately…]( Alexandra Perry: Colorado is a testament to that, because it's bringing in millions in tax revenue. Jimmy Mengel: Yeah, absolutely. Colorado brought in somewhere close to $200 million in taxes last year, and that will continue to grow. That was kind of funny, too, because their governor, John Hickenlooper, was adamantly against legalizing marijuana. They put it up for a ballot measure, and they passed it, and months later, Hickenlooper himself essentially said, "I was completely wrong about this. This is one of the best things that's happened to Colorado in a while." Essentially once Colorado legalized marijuana for recreational use, they saw a massive jump in tourism, a huge amount of tax revenue, and it's just worked out for everyone. It takes a little time, and a lot of people were obviously hesitant to just embrace legalizing marijuana, because it has had such a stigma over the years, but once it happens, it's a Pandora's box. You can't close it, nor would you want to. Essentially, we have the states that are legalized now, California being obviously the crown jewel of the entire industry, but over the next couple years, you're going to see a ton of states doing the same thing. Arizona, Connecticut, Hawaii, Kentucky, here in Maryland, Mississippi, Missouri, New Hampshire, New Jersey, New Mexico, New York, Pennsylvania, Texas, and Wyoming all have active measures to legalize marijuana this year alone. Each time one of those states gives it the green light, that's just more and more money flowing in, and more and more businesses to invest in. Alexandra Perry: Right now, even if 90% of the stocks that you've actively chosen are in the Canadian space, do you think it's a safe bet to continue to invest in the American market? All that considered, even if legalization takes years, I think these stocks will continue to gain in momentum just through the individual state legalization. Jimmy Mengel: Yeah, they absolutely will. The problem is right now there really aren't that many U.S. stocks to invest in, but I have my eye on a few. Many are still Canadian companies, but they are invested in the United States market. If I can talk about one company in particular, it's a company called Future Farm Technologies (CNSX:FFT), and what they have done is bought and started cultivation facilities in Florida for medical marijuana, and obviously Florida has got a demographic where medical marijuana would appeal to older people suffering from chronic pain, cancer pain, that sort of thing. What you see is a lot of companies that while they may be formed in Canada, they're starting to plant their flags in the U.S. market pretty much preparing for legislation to go through. Advertisement “It’s the best thing I’ve ever done with my money!” While you’ve been buying actual shares in America’s biggest companies like Facebook, Wal-Mart, Target, and Amazon... A group of savvy folks have been “backdooring” these massive, cash-rich companies... pulling millions of dollars out of their corporate accounts... And funneling them directly into their own personal accounts each month. All without buying a single share of these companies' stocks. [Full story here.]( Alexandra Perry: This is a question that I try to ask all guests of our podcast. It's the “red flag” question, because of any emerging sector, cannabis being an emerging sector still, you have a lot of people that attempt to capitalize on investors that are just excited about the space, but don't necessarily look at the company. Do you have red flags that you immediately see and back off if you're looking at a company and analyzing it? Jimmy Mengel: Yeah, absolutely. This sector is definitely like swimming with sharks, because everyone knows that cannabis is a big buzz word, and a lot of companies will just slap cannabis on a shell company, and then go out and talk a big game, and don't have really anything to sell or anything at all. That's happened quite a few times. There was one company I noticed that was called Integrated Parking Solutions, and then overnight, they became Integrated Cannabis Solutions. It was a total bullshit company. You've been dealing with parking meters, and now, all of a sudden, you're going to be selling marijuana? How does that work? There's a lot of that kind of thing. The same thing with mining companies. A lot of Canadian mining companies, instead of mining silver, or cobalt, or whatever they're doing, they'll just, all of a sudden, turn into a marijuana company overnight, issue a bunch of cheap shares, and then pump and dump it. That's a huge issue. Alexandra Perry: So how do you decide who to invest in? Jimmy Mengel: What I like to look at for some of these companies is a great management team. If you look at the team members, it shouldn't be just one or two financial guys. It should be a team of experts that have done this before, especially in the cannabis space. You look for growers. You look for investor relations involvement, people that have actually had success in the space. Otherwise, if you don't see a good team, then I don't see any reason you should be investing in these companies. What I usually do is have conference calls with the CEOs, with the investment relations teams, and try to figure out if you're a medical marijuana company. Who are your medical experts? Have they done this before? You pretty much go from there. The team will tell you a lot of what you need to know. Advertisement “Secret Stash Assets”: Beating the Market By 4.5 Times Over the Past 15 Years A small group of obscure investments has trumped Wall Street by more than 4.5 TIMES since 2000. They helped in-the-know investors multiply every $25,000 invested into $355,039 of easy gains! These investments are tied to a niche real estate market that’s about to explode. Aging baby boomers are about to DOUBLE the value of this TRILLION-DOLLAR real estate niche. Three specific “Secret Stash Assets” will soar as a result. [Click here to get the list.]( Alexandra Perry: I think a really big question in marijuana, especially because it's an industry that's teetering on that edge, is it legal, is it not legal, is the difference between a company that touches the plant, and a company that doesn't touch the plant, and the repercussions for investors. Jimmy Mengel: In the U.S. especially, because there is that threat of the government coming in and seizing your crops. For instance, I had invested in a company called Helix TCS (OTC: HLIX), and they are a company that does not touch the plant. It stands for Technology, Compliance, and Security. It's these ancillary businesses, kind of like the picks and shovels of the gold mining industry, where it's just like you're not buying the gold, but you are investing in something that makes the gold possible. This company, in particular, they provide compliance and legal consulting. If you're starting a marijuana dispensary, for instance, there's a ton of legal compliance to go through, so you can't just up and start a business. You best know the legal ramifications of what you're doing. They'll provide the legal consulting to get you started, and then on the back end, security is a huge issue. Because banks won't touch a lot of the marijuana businesses, they're dealing in cash. You have some dispensaries rolling out with $200,000 in cash, and having to take it to the bank in a bag. They'll provide security for that, because obviously you don't want to be doing that every week. That kind of business, it's pretty safe. They don't touch marijuana. They're just consulting and providing services for the industry. I think you'll see more of those type of companies crop up, but Helix TCS, for instance, even being a U.S.-based company in Colorado, I sold that in our Marijuana Manifesto portfolio for 220% in a month. You'll see little examples like that pop up, where a weird niche business blows up in a blink of an eye, and then they're beholden to the federal laws against the marijuana itself. I think you'll see more of that cropping up as well. Alexandra Perry: Jimmy, thank you so much for coming on to the podcast. We'll have to have you come back on for other cannabis-related podcasts in the future, because it's a very hot topic and we get a lot of questions about it. Jimmy Mengel: My pleasure. Any time. --------------------------------------------------------------- I hope you enjoyed Jimmy's interview. You can [try out his Marijuana Manifesto newsletter risk-free right here](. He's about to recommend three new companies that meet all of the criteria he mentioned in his interview and should go gangbusters as Canada and the U.S. continue to legalize marijuana. This is going to be a $10 billion industry in Canada next year, and many times more in the U.S. If you think you missed the party when it comes to marijuana stocks, think again. This party is just getting started. [Get in now](. Call it like you see it, [Nick Hodge Signature] Nick Hodge [[follow basic]@nickchodge on Twitter]( Nick is the founder and president of the [Outsider Club](, and the investment director of the thousands-strong stock advisories, [Early Advantage]( and [Wall Street's Underground Profits](. He also heads [Nick’s Notebook](, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's [page](. *Follow Outsider Club on [Facebook]( and [Twitter](. [Sprott_Symposium_2017_300x250]( Enjoy reading this article? [Click here]( to like it and receive similar articles to read! Browse Our Archives [Before You Invest in Marijuana...]( [The Coming Fracking 2.0 Boom]( [A Different Kind of Gold Project, Part II]( [A Different Kind of Gold Project]( [Bear Signs: Nasdaq Plunges, Volatility Spikes, and Bad Earnings]( --------------------------------------------------------------- This email was sent to {EMAIL} . It is not our intention to send email to anyone who doesn't want it. 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