News out this week is that there is strong interest in cannabis among senior citizens.
Upon reading this news, a very prominent investor and friend emailed me. (I won't say his name, but you would know who it is if I did.)
His email read simply: Too late.
What he means is that if the elderly are now hip to weed... it's too late to make any profits. Akin to Joe Kennedy and the shoeshine boy, or your mom joining Facebook.
My friend is wrong.
The cannabis industry is still in its infancy.
It's not even legal nationwide in the U.S. for crying out loud.
The article in question was in the Vancouver Sun. It was specifically about residents in British Columbia, and how their interest perked up after legalization.
So we're talking about residents of one Canadian province - while we still have the rest of the entire world to go!
Some points...
Part of what's driving this is children of aging adults are telling their parents there is now a legal alternative to the anti-inflammatories and painkillers they're taking. That indicates seniors aren't entirely learning about it on their own... yet. It's still early.
This was a few seminars. Saying the upside of an entire sector is over because 50 seniors showed up to an informational session in North Vancouver is... wrong. It's still early.
These seniors aren't customers... yet. They are seeking information. They aren't even buying yet. It's still early.
We haven't seen any significant release of products from the mega-partnerships that have been announced like Constellation/Canopy, MolsonCoors/Hexo, and others. Cannabis beverages and edibles aren't even legal in Canada yet. It's still early.
As the article said:
There's a lot to know now, like the differences between delta-9-tetrahydrocannabinol (THC) and cannabidiol (CBD), the effects of indica versus sativa, and the benefits of delivery methods like smoking, vaping and ingesting.
One of the key bits of information is the difference between THC and CBD. Unlike THC, cannabinoids like CBD won't get you high.
And that for me is the most critical point. Most of the stock gains we've seen so far are from companies that get you stoned - licensed producers of cannabis with THC.
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We have not seen the development of the CBD market yet. That includes everything from CBD oil to creams and pharmaceuticals based on the CBD molecule.
That is all happening now.
As I've told you, cannabis shortages are expected to persist in Canada for the remainder of the year.
In time, you'll see pharma and biotechs enter this space in a big way. New treatments based on CBD will emerge that use specific CBDs. CBC is proving to be good for pain while CBN has shown anti-seizure properties.
You didn't even know there was CBC and CBN... because it's still so damn early in this market.
Which is why I would be checking out this one company that's poised to dominate the CBD space.
And finally, from my seat as a publisher, I get an inside view of search and click and spend habits. I can tell you without a doubt that interest in the cannabis space is still booming and growing.
It's still early.
But the sector is evolving.
And I think the next round of profits will come from CBD.
Call it like you see it,
Nick Hodge
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.