Rising from the ashes – the resurgence of the Cannabis sector
After two years of wallowing in the dumpster, the cannabis sector is off and running again.
A big reason? Cannabis laws are beginning to loosen around the world.
That country’s Chamber of Deputies approved a bill on March 10 that legalizes recreational cannabis.
The next step is for the Senate to vote on the bill.
Members are expected to pass it.
Once they do, it will then go to President Obrador (who has signalled support for the measure).
Then there’s the United Nations (UN).
A UN commission voted last December to rescind medical cannabis’ previous designation as a “dangerous drug”.
This bodes well for medical cannabis legalization in more countries, because many of them look to global conventions for guidance.
And of course there’s the big kahuna – the rise of the Democratic Party in the U.S.
As everyone knows, Joe Biden became the 46th President of the United States late last year.
Now that his Democratic Party also controls the House of Representatives and Senate, odds of the U.S. federal government legalizing cannabis have risen dramatically.
Last December the House passed the Marijuana Opportunity Reinvestment Act (MORE Act).
If enacted, the MORE Act would remove marijuana from being considered a Schedule 1 drug.
Passage would also expunge the records of those convicted of simple possession, and decriminalize marijuana at the federal level.
Last but not least, there is The Secure And Fair Enforcement (SAFE) Banking Act that could potentially pass this year.
Make no mistake, that would unleash a flood of financing into the industry, and fuel significant growth.
Of course not all stocks in the sector would rise – we’re unlikely to see investors lose their senses, like they did in the mid-2010s.
Back then they bid up virtually every company in the cannabis space.
But now the game is tougher. You have to do serious due diligence if you want a shot at life-changing gains in this sector.
One company worth keeping your eye on is Michigan-based Gage Growth Corp.
Gage just went public on the Canadian Securities Exchange (CSE) under the symbol ‘GAGE’.
The Company is positioned to dominate the legal Michigan cannabis market, one of the top five largest cannabis markets in the U.S.
Michigan cannabis sales reached $985 million in 2020 – up 250% from 2019, and we expect this strong growth trajectory to continue throughout 2021 and 2022.
According to a study by Michigan State University, total state sales could reach $3 billion within the next four years.
Gage stands to grab a big piece of that pie.
It has already built one of the leading brands in the state.
This is huge, as Michigan has been historically a very strong medical cannabis market in the U.S. (behind only California in terms of medical card holders).
And now that Gage can sell recreational cannabis – the result of Michigan’s 2019 legalization of adult-use pot – the company is poised for explosive growth.
That’s already happening, as Gage plans to boost the number of its retail stores from 7 to 20 by the end of 2021.
It also plans to expand its cannabis production capacity, from 1,500 lbs in April to 3,000 lbs by June of this year.
And that’s not all: by early 2022, the Company says it expects to increase its production to 7,000 lbs per month.
Assuming a conservative selling price for cannabis of roughly US $5,000 per pound, at a production capacity of 7,000 lbs per month, Gage could be raking in US $35 million in revenue per month by 2022.
The Company has also inked three exclusive partnerships that will expand the Gage brand name nationwide.
One is with a private California company called Cookies.
Cookies is one of the most respected and well known cannabis and lifestyle brands, founded and run by renowned rapper Berner.
Gage’s agreement with Cookies gives them exclusive rights to sell the entire Cookies line including Runtz, Lemonnade, Minntz, and more in its Michigan stores.
In addition, Gage will have the exclusive rights to operate Cookies-branded dispensaries in Michigan.
Two Cookies branded stores have opened already, including a 3,500-square-foot location in Detroit’s 8 Mile.
The other exclusive partnerships Gage has are with Slang Worldwide (OTC: SLGWF), better known as SLANG, and Blue River™ Extracts & Terpenes.
SLANG features 65 SKUs and 6 distinct brands that cover a wide variety of products in the vape, edible and concentrate categories.
Blue River™ is a leading cannabis brand that has built a reputation amongst cannabis afficionados for its enhanced terpene-rich products, which have earned them 57 cannabis awards so far.
Now, both brands will be available at Gage stores.
Bottom line – with the political landscape loosening marijuana laws worldwide, investors would be wise to take a good hard look at stocks in the cannabis sector.
And with Michigan being one of the fastest-growing cannabis markets in the US, we think Gage should be among those on investors’ radar.
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