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Recent research here at Wyatt Investment Research has focused on marijuana stocks and this booming industry.
Earlier, I explained that my view of the industry was a bit different . . . and that the details were going to be critical to making big money in marijuana stocks.
Now that we’ve discussed the fundamentals and the massive upside of in marijuana, I’d like to talk about my biggest concern about the marijuana market and how this concern is actually creating a staggering opportunity.
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The Best Bet in Marijuana Today
Every bubble bursts.
No exceptions. Just look at oil.
When oil traded above $80 per barrel, it sparked a massive investment in shale production.
Eventually supply surpassed demand, prices crashed, and oil stocks collapsed.
The dot-com bubble was the same.
The housing bubble followed a similar pattern as well.
It happens all the time, every time.
When I started researching the marijuana industry, this was a big concern.
With all the hype around marijuana, I wondered if we were looking at a bubble-burst scenario.
After all, the recent elections in the U.S. opened the floodgates of investors into marijuana companies.
My greatest concern was that all the new investment could create TOO MUCH marijuana capacity.
If supply exceeded demand, we could be looking at a market flooded with too much cannabis. And prices could suddenly drop.
My research has found that’s not going to be the case for a very long time.
Marijuana Bull Market: Canada Outlook
Let’s take a look specifically at the Canadian marijuana market.
Canada’s marijuana industry is a bit different than the U.S. market.
Marijuana production is federally regulated in Canada (the federal government even issues official licenses).
The Canadian government is expected to lay out its plan for full legalization of all forms of marijuana use.
As a result, Canada’s marijuana market is booming and big money investors are plowing into it.
In fact, over the last year, C$685 (which is about US$513 million) has been invested directly in Canadian marijuana producers.
The massive capital infusion is mainly used to expand operations owned and operated by the country’s 38 fully-licensed marijuana growers.
The capital is already being deployed across the country; some companies are targeting 500% expansion in growth capacity.
Here’s the critical thing, though: this sizeable expansion is still not enough to meet demand.
According to marijuana industry research published by a top Canadian brokerage firm, the expansions underway are not enough to meet demand.
The analysis of the Canadian marijuana market found that if all the current investment in marijuana growth expansion was spent wisely, there would still need a minimum of another C$403 of capital investment.
And that’s just to match current demand for legalized marijuana.
In other words, despite the massive investment so far, the Canadian marijuana market is still underfunded by more than 40%.
There may be a bubble in specific marijuana stocks that are trying to tap into the appeal of this growth industry.
However,Canada’s booming marijuana industry doesn’t appear to be in bubble territory. That is why I expect the Canadian marijuana growers will continue to thrive in 2017.
On Wednesday, April 5, I’m hosting a LIVE webinar to reveal details on the next huge marijuana IPO.
>>> Click here to confirm your spot right now.
Good investing,
Ian Wyatt