Marijuana Stocks Offer a Wealth of Opportunities Outside of U.S. Pot Legalization

Potential for Marijuana Stock Gains Around the Globe

There’s a simple fact that I mention pretty regularly in Profit Confidential: marijuana stocks will not reach their true potential without federal U.S. marijuana legalization.

The largest economy on Earth has millions of willing consumers chomping at the bit to enjoy marijuana that isn’t prohibited by their federal government.

But here’s the thing, we’re not likely to see federal marijuana legalization in the U.S. in the next few years. There’s definitely a case to be made that pot is still several years (or even a decade) away from becoming legal across the U.S.

Which isn’t to say the situation can’t change—and fast.

I’ve written extensively about all the ways that marijuana could become legal—or at least decriminalized—in the U.S. (the latter of which would be functionally the same as legalization). This, in turn, would likely lead to massive gains from pot stocks across the board.

And of course, we could see U.S. marijuana stocks get listed on major U.S. exchanges, likely topping Canadian pot stocks in terms of market cap.

Better yet, we’ll probably see Canadian marijuana stocks begin making inroads in the U.S. market, which would send their share prices soaring. So, investors who have gone long on many of the top pot stocks I’ve written about for years would be more than pleased.

But again, this is all speculation. While legalization is inevitable, in my view, there are still many questions regarding the timeline.

Going long on marijuana stocks is still a very strong play, in my opinion, even if U.S. marijuana legalization hasn’t worked out quite the way we’d hoped.

But I digress. We already know that investors in pot stocks would benefit greatly from legalization in the U.S. But the question is, what other events could cause marijuana stock-price surges? And what indicators and trends should investors be aware of between now and the nationwide marijuana legalization in the U.S.?

The first is global expansion.

Yes, America is rich and populous, but it’s not the only rich and populous country in the world. Every new market that opens to legal pot is going to make things easier for marijuana companies to expand—and for newcomers to hit the market.

I’ve been watching European markets for opportunities. There have been moves made in the U.K., Germany, Italy, and many other countries that, if successful, would provide new avenues for growth by marijuana stocks.

Of course, these countries won’t be as profitable for the pot industry as the U.S. will be when it has federal legalization, but that doesn’t mean they’re worth disregarding. Paying attention to marijuana legalization efforts across Europe could help investors more optimally time their investments.

Looking for pot stocks of companies that have made expansion efforts into these nascent markets in anticipation of legalization is a great way to evaluate which marijuana stocks are likely to provide the most gains.

Mexico is another interesting case. The country is quite populous and rich, and its Supreme Court recently decriminalized marijuana for recreational use. (Source: “Mexico Marijuana: Top Court Decriminalises Recreational Use of Cannabis,” BBC News, June 28, 2021.)

While that’s unlikely to result in immediate changes to how marijuana is traded in Mexico, it does open up the path toward legalization in the near future.

Marijuana companies that look to Mexico and find ways to enter the market in advance of legalization are positioning themselves to see massive gains as the country transitions to becoming the next major economy to legalize the drug.

The next thing that investors ought to keep their eyes on is individual pot companies’ investments toward growth. And I don’t just mean expanding into global markets—though, as mentioned above, that is a great idea.

There are so many different segments of the nascent marijuana market that remain untapped, from luxury pot, to alcohol-infused beverages, to edibles, to cannabidiol (CBD).

Companies that are able to expand into these markets are the ones most likely to see rapid financial growth quarter-over-quarter, even as we wait for more marijuana markets to legally open up around the world.

Overall, what we have is a fast-growing market with a wealth of opportunities. The pot stocks that are most likely to see the biggest gains are the ones from the companies that are able to continue growing and being ready for new opportunities when the time is right.

For investors, it means finding marijuana stocks of companies that are expanding globally into the countries that are the most likely to legalize marijuana in the near future—and stocks of companies that are expanding their product lines.

Analyst Take

One thing I’ve strongly believed regarding the pot market for years is that the companies that are looking to grow in tandem with the overall market are the ones most likely to see large gains.

With so many opportunities permeating the industry, it would be unwise for a marijuana company to sit on its laurels. Being able to get out in front of new opportunities is what’s going to separate the pot stocks that will grow the fastest from those that will see lagging gains or stagnate.

Therefore, investors will need to identify and track the marijuana stocks that are best positioned to see gains from huge events like U.S. marijuana legalization and smaller events that are more likely to occur in the near term.