- Investing in cannabis is less speculative today than it’s ever been before.
- Anthony Planas developed a three-pillar system for picking the most lucrative marijuana stocks.
- Learn more about the booming marijuana market, and Anthony’s tricks for finding the next 10-bagger pot stocks, here.
Tomorrow, I’m presenting at Banyan Hill’s Total Wealth Symposium. I want to give you a sneak peek of my talk.
The Total Wealth Symposium is a three-day event in Amelia Island, Florida. Banyan Hill’s top experts will be there to present on the biggest opportunities they see in the stock market.
Naturally, my talk is centered on cannabis. Today, I want to share some of the highlights before I present tomorrow.
On the Hunt for Pot’s Next 1,000% Winner
Watch my video below to catch the latest marijuana market update.
Opinions on the cannabis sector vary wildly. I’d like to clear up a few points and share my view of where the sector is today.
Investing in cannabis is less speculative today than it’s ever been. Companies are producing, shipping and selling products in stores — both in the U.S. and Canada.
Gone are the days of picking pot stocks based solely on “anticipated” production.
Now we can compare the cost of production and average selling price between companies.
But there’s still some speculation. That’s because it’s a fast-evolving sector.
Regulations are new and often change on the fly. This is due to new markets opening up, such as markets for wellness and beverage products, that have not been tested before.
We need a system to identify the best growth areas within the sector — and find the companies that are in the right position to capture market share.
3-Pillar System for Picking Cannabis Stocks
My colleagues and I have developed a new system for picking cannabis stocks. We look at three core pillars:
- Management team.
- Capital structure.
These pillars help us find companies with a sound foundation that they can build on. Let’s run through what we look for in each.
Pillar No. 1: Strategy
Strategy is an important one.
The cannabis market is really three different markets:
- Medicinal. This is the fastest-growing and most well-known sector. Patients use cannabis to treat a variety of physical and psychological diseases, as well as pharmaceutical-induced side effects.
- Wellness. This sector revolves around the use of cannabis compounds in foods, ointments and drinks.
- Recreational. This sector offers an innovative platform for new uses of cannabis. You’ll find new products such as infused drinks and snacks.
Each holds huge potential. But we only want to own companies that has a unique and specific strategy for tackling a subsector.
There are plenty of companies that claim to be diversified across all three subsectors. But they don’t have a sound strategy for any one.
Pillar No. 2: Management Team
We want to see a management team with a track record of success.
Because the cannabis sector is so new, we can’t be too picky about people having a tenured track record in cannabis.
We want people who have grown a business and returned value to shareholders. And just as importantly, we want to stay away from names that have scalped investors in the past.
Pillar No. 3: Capital Structure
Cannabis is a high-growth sector. But it’s also capital-intensive. That means companies have to spend a lot before they start to make anything.
How a company goes about solving this problem makes all the difference for shareholders.
The most common way to raise money in this sector is to sell shares or issue warrants. Issuing new shares dilutes current shareholders’ holdings. That means they get less money than they were expecting — if they get any at all.
If this is taken too far, we can see the market cap of the company grow while the share price stays stagnant or falls.
We want to see companies that spend money wisely.
They should only issue shares when the growth opportunity exceeds the dilution for shareholders. For larger producers, debt can be a sound way to fund growth while preserving shareholder value.
Total Wealth Symposium: Exclusive Cannabis Information and More
With more than 300 attendees at this year’s Total Wealth Symposium, I know a few people reading this will be at my talk tomorrow.
For those of you who couldn’t attend, we offer a live-stream of the entire event.
I’m going to take a deeper dive into the unique opportunities that exist in the medicinal, wellness and recreational cannabis markets. I’ll also be revealing my top stock pick for 1,000% returns in each market!
Not only can you see my talk, but you can also watch all our top experts present, including Matt Badiali, Jeff Yastine and Paul Mampilly. Dave Ramsey is also giving a presentation that you can view!
And you can always attend next year’s Total Wealth Symposium. It will be in San Diego, California! Stay tuned for information on early sign-up opportunities.
Internal Analyst, Banyan Hill Publishing
P.S. Check out my YouTube channel. Hit the subscribe button so you won’t miss any of my weekly updates on the latest marijuana market news.