Pot Stocks and the Risk-Reward Ratio

Land and Real Estate: It all starts with land, the scarcest resource on Earth. No land… no growers… and no marijuana growers. And while it’s true that today’s innovative growers are exploiting cutting-edge tech such as hydroponics and tech-controlled greenhouses, those facilities must still be housed somewhere.

Dispensaries: You’d be hard-pressed to find a segment of the modern economy with as much potential for explosive growth as marijuana dispensaries. And that growth is happening right now. For one thing, it’s estimated that 2.6 million Americans across the entire country would seek medical marijuana treatment if it became available in their state.

Banking and Venture Capital: The Marijuana Business Access to Banking Act of 2015 (H.R.2016) was written to “prohibit a federal regulator from (1) terminating or limiting the deposit or share insurance of a depository institution solely because it provides financial services to a marijuana-related legitimate business.” Until that bill becomes law, a new breed of financial entrepreneurs is stepping into this void. Some provide payment processing solutions that help dispensaries take in all that cash from their customers.

Social Media: According to Fortune, “Dozens – by some estimates, hundreds – of cannabis-related companies operating legally within their respective states have suffered social media account suspensions. Not surprisingly, new social media websites are stepping into the breech. Expanding pot companies are willing to pay a large sum to drive revenues with social media.

Even with the eight rapidly expanding sub-sectors I’ve listed, I still get the same response time and time again:

“But Michael, investing in pot is just too risky!”

And that’s precisely why I recommend pot stocks based on a Tier System.

Tier 1. Tier 2. And  Tier 3.

And using my ratings, my subscribers can allocate their “Pot Portfolio” in a way they are comfortable with.

If you want to aim for the moon, and you can afford the risk,  you might allocate more to Tier 1 stocks.

If you want reasonable returns, and you want low risk, you might allocate more to Tier 3 stocks.

Diversification is critical factor in all types of investing and it’s no different for cannabis.

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