‘The Canada Effect’ of Pot Legalisation Could Go Worldwide

It’s been a big year for Canada. After accomplishing one of the best trade deals in history: shipping off Demar DeRozan for two-time Defensive Player of the Year, Kawhi Leonard. The Great White North has been on a tear, winning 23 of their last 30 games.

Oh, and if that wasn’t enough for the New Zealand of the Americas, they also just legalised recreational cannabis.

Despite how good the Toronto Raptors are playing, it’s this fact that’s keeping Canada in the spotlight, and for good reason too.

From the early sales data, and the glaring supply shortage, it’s pretty easy to see how this market could potentially be worth billions, and not just for the corporations growing the stuff either. As subscribers to Australian Small-Cap Investigator know, there’s even opportunities right here on the ASX to get in on the wealth cascading out of this market (to find out about theses recommendations, including a ‘special recommendation’, check out ASI here).

But back to Canada, there’s something you need to know about the Land of Canucks: they did nothing groundbreaking.

See, while Canada is being praised for their progressive, open-minded new laws, they’re really just following in the footsteps of countries like Uruguay and the Netherlands, and American states like California and Colorado.

MoneyMorning 15-12-18

Source: Wikipedia / Australian Small Cap Investigator

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As you can see in the graph above, while we’re still in the early stages of adoption, the true innovators have already worked their magic, and now everyone else is starting to wake up. Though that’s not to say that the best opportunities have been and gone, it’s quite the opposite. If you look at the angle of the curve, you can see that we’re just about to come into the steepest part of the adoption timeline: this is going to be where the real fortunes are made. (ASI readers are not only aware of this, but acting on it. To join them, click here.)

South Korea, a relatively conservative nation, has just become the first East Asian country to legalise the drug, at least in its medicinal state. So too have Australia and New Zealand, opening up Oceania to the opportunities that come with the miracle plant.

By 2021, the US will only account for 57% of global sales. While that may seem like a large percentage, and it is, it’s a lot smaller than the 90% it sits at currently.

Tip off in the cannabis sphere is imminent, and readers of ASI are sitting in the corporate box.

Three Golden Rules for Investing in Pot Stocks. Download your free report now.

This week in Money Morning

The S&P 500 (largest 500 US stocks) is now in the red for 2018. The All Ordinaries (largest 500 Aussie stocks) even more so. But it’s not just stocks, bond yields are on their way down too. In Monday’s Money Morning, Harje discusses how to take advantage in periods of uncertainty. When investors are fearful opportunities pop up, so it’s lucky for investors that the market is in a pretty bad mood right now. To learn more about where Harje says to look when prices fall lower, click here.

Cheap goods from China are already killing US manufacturing jobs. On top of that, they’re taking American technology and American innovation to make themselves better and stronger. It’s not something you want if you’re the ‘America first’ guy. So, we find ourselves with a whole bunch of tariffs flying around. In Tuesday’s Money Morning, Harje discusses the hot topic at the moment: the US-China trade war. He believes the back and forth of the US taxing China where it hurts and China taxing the US where it hurts is a vicious cycle. To learn more about what Harje thinks will happen next, click here.

In Wednesday’s Money Morning, Harje discusses the Australian Competition and Consumer Commission (ACCC) deciding to target tech giants Alphabet, Inc. [NASDAQ:GOOG] and Facebook, Inc. [NASDAQ:FB]. Harje says one thing he really dislikes, but usually goes unnoticed, is tall poppy syndrome: the culture of cutting tall poppies (the successful and wealthy) down to size. Apparently the above two ad platforms are too successful, according to the ACCC. Head of the Commission Rod Sims had some young analysts take a closer look into both companies. To find out why Harje believes the ACCC is targeting the most successful companies, click here.

Of late, the markets seem to overreact to any kind of political news. Trade talks, Trump tweets, the latest rumble with Trump and Democrats. It’s pushing and pulling markets every which way. In Thursday’s Money Morning, Harje discusses the current political turmoil in France, and in turn around the world. French President Emmanuel Macron is responding to protests in Paris by saying he is going to lift the minimum wage. But Harje thinks higher minimum wages will just create more problems, more anger and more riots. To learn why, click here.

In Friday’s Money Morning, Harje revisits the ongoing trade war debacle between the US and China. One of the beefs Trump has with China is their lack of US purchases. American businesses buy tonnes of cheap manufactured goods from China. The least they could do is return the favour: One of those favours is to buy US soybeans. China is the world’s largest buyer of soybeans. Chinese businesses could buy soybeans from other nations, Brazil for example. And when the government put a tax on US soybeans that’s exactly what Chinese businesses did. They bought a whole lot more soybeans from Brazil because they were cheaper. But according to Reuters, US soybeans are back on the menu. To find out what happened next, click here.

Kind regards,

Alana Sumic,
Editor, Money Weekend

Alana Sumic is part of the editorial team here at Money Morning. She contributes to bringing you Money Morning each day, along with all of Fat Tail Investment Research’s many other publications.

As the Editor of the weekend edition of Money Morning Alana brings you a summary of the news for the week, and her own take on the week’s most important story in markets. She is also a writer and editor for Fat Tail Investment Research’s political publication, The Australian Tribune.

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