Cannabis, Edibles and "e-Weed"

05/05/2017 2:50 am EST


Michael Robinson

, Money Morning

The days when marijuana "edibles" were limited to a bunch of teens passing around a pan of homemade pot-laced brownies are long over, asserts Michael Robinson, editor of Money Morning.

The legal marijuana industry now grosses more than $5.4 billion a year through the sale of cannabis-infused food and drinks — for people who want to avoid the harmful effects of smoking, but still want the drug's potent effects. And as marijuana continues its march to legalization, that number will continue to climb.

Over the past several decades, "edibles" have become one of the most lucrative legal marijuana opportunities on the market.

One of my favorite speculative plays in this booming pot-stock niche right now is Nevada-based Cannabis Sativa (CBDS), which makes and sells a range of herbal-based skin-care products including salves, balms, and lotions.

Incidentally, two-time Libertarian Party presidential candidate Gary Johnson was part of the group that helped get the company off the ground back in the mid-2000s.

But by far, it's most exciting and lucrative line of business is edibles. The firm's Hi-Brand's International Inc. subsidiary is a major player in the segment.

But it has a lot more going for it The timing is excellent. You see, there is no national marijuana "brand" yet, and no major retailer has a foothold in this market.

Therefore, Cannabis Sativa executives see the opportunity to make their stores like the Apple Store in terms of user friendliness, pleasing signage, and range of products.

State governments, especially those where marijuana has recently become legalized and regulated, stand to benefit immensely from these kinds of businesses, both in job creation and tax revenue.

In Colorado, one of the first two states to take recreational marijuana above-board, stores pay a retail and medical sales tax of a 2.9% along with a 10% retail marijuana sales tax and a 15% marijuana excise tax.

Beyond its push into edible products and store franchises, Cannabis Sativa has also patented a unique strain of pot, something they call "Ecuadorian Sativa," or "CTA."

What's more, Cannabis Sativa has a bold leap into the "social e-weed" niche with its app "iBudtender" that offers a directory of thousands of dispensaries, cafés, etc., through which users can locate and educate themselves about certain establishments.

IBudtender is getting rave reviews from users and industry players alike. But, even better, this platform gives the company the opportunity to jump from state to state as legalization spreads and expand into rapidly growing markets at a low cost.

Now, this is a speculative play on a micro-cap stock – just $93.6 million. This isn't a weed stock to bet the farm on, so make sure you're using appropriate capital when you buy. This is likely going to be a volatile ride.

Subscribe to Money Morning here…

Related Articles on HEALTHCARE

Keyword Image
"Indirect" Bets on Cannabis
10/10/2018 5:00 am EST

Briton Ryle is a leading growth and income expert; here, the editor of The Wealth Advisory looks at ...

Keyword Image
Alexion Aquires Anemia Play
10/10/2018 5:00 am EST

Alexion Pharmaceuticals (ALXN) is a biopharmaceutical company that researches and manufactures treat...