Buy Big Cannabis With 9X Growth in Next Ten Years! Sell Big Alcohol

CBD News Pick – ValueWalk

A growing relative value trade may be emerging in the cannabis market and a September 12 report from Cowen and Company points to stellar industry profit potential. As the general public begins to understand nuance between the risks marijuana usage, making distinctions between hard drug addiction, the attitudes and politics are shifting to a consensus opinion that points to growth.

But with industry growth comes winners and losers. Cannabis investing is a fast growing field with opportunities to reach new heights, but also for major establishment players peril could be ahead.Cowen, for its part, raises a topic that might be the consumer discretionary stock story of for the next decade as one major sin industry, big tobacco, will likely be pitted against big alcohol.

Cannabis market growth projected to be a wet dream

With growth projected to reach $50 billion by 2026, cannabis is set to become the nation’s next “budding” industry, to steal a term from Cowen report. The future for weed investing looks spell-binding.

“Assuming federal legalization, we believe the formal, non-therapeutic cannabis industry can grow at a 24% CAGR over the next 10 years,” the report titled “The Cannabis Compendium: Cross -Sector Views on a Budding Industry,” noted. There are medical negatives to cannabis use, much like smoking a cigarette or consuming alcohol. But unlike hard drugs, the societal perception correlated to cannabis health risks “has fallen notably,” the report said. “Cannabis is generally considered less risky than alcohol,” the report stated.

There are medical negatives to cannabis use, much like smoking a cigarette or consuming alcohol. But unlike hard drugs, the societal perception correlated to cannabis health risks “has fallen notably,” the report said. “Cannabis is generally considered less risky than alcohol.”

Driving this trend are “notable changes in consumer behavior and sentiment, which in turn is driving votes.” More and more states are not only legalizing medical cannabis, but increasingly recreational use is being approved by voters.

The societal trend towards use is a documented to the point the Cohen analysts think cannabis stocks should be categorized as the Consumer Discretionary segment due to consistent customer demand. In fact, using Colorado as a benchmark, there is potential for regulated dispensaries to be more predominant than Starbucks in the near future, the report projects.
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Cannabis industry to expand to $50 billion by 2026 | Bloomberg

CBD News Pick – Chicago Tribune | Bloomberg

The legal cannabis industry in the U.S. may grow to $50 billion in the next decade, expanding to more than eight times its current size, as lawful pot purveyors gain new customers and win over users from the illicit market, according to a new report.

Legalizing recreational use in California, where the drug is already medically permitted, is on the ballot in November, and approval of that measure alone would triple the size of the nation’s current $6 billion legal industry, according to a report from 10 Cowen & Co. analysts released on Monday. In all, voters in nine states will vote on weed-related initiatives this November — five to legalize the drug for all adults and four to allow for medical use.

Pot already is legal for recreational use in Alaska, Colorado, Oregon, Washington and the District of Columbia, and is medically permitted in 25 states. Cowen’s forecast assumes federal legalization of the drug, a measure that has more than 50 percent popular support.

“Cannabis prohibition has been in place for 80-plus years, but the tides are clearly turning,” the analysts said.

The expanding industry will affect big business even though the current competitive landscape is largely made up of smaller startups. Because the plant is still federally illegal, large companies have shied away from getting involved.

Legal weed would be a major opportunity for Big Tobacco, Cowen said. Vapor technology — a popular technique for ingesting both tobacco and cannabis — is an essential part of tobacco’s less combustible-dependent future. Companies like Altria Group Inc. and Reynolds American Inc. already have expertise in vapor and crop-growing technologies, as well as familiarity dealing with complex regulatory frameworks.

Tobacco companies may make up about one-fifth of the cannabis industry by 2036, adding more than 20 percent to their revenue, and nearly doubling tobacco’s underlying growth, the analysts said.

For alcoholic-beverage makers, legal marijuana is more foe than friend. Alcohol consumption has declined over the past five years, especially with men, while cannabis use has risen. The number of drinkers who also used marijuana increased, and the number of cannabis users who drank decreased, Cowen said.
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For original content on the cannabis industry, plus news articles and insider views | handpicked by the CBD Business Blog Editor to keep you informed on cannabis and cannabidiol (CBD) industry news:

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