The marijuana trend is taking off...
Last month, I told you
marijuana is going to be the next multibillion-dollar industry.
Although still illegal on the federal level, sentiment toward the drug is improving. According to a recent Gallup poll, nearly 60% of Americans believe marijuana should be fully legalized.
As a result of the shift in views, states like New York and Maryland have approved the drug for medicinal purposes. In total, 23 states and the District of Columbia have legalized medical cannabis. Meanwhile, Colorado and Washington have also approved the drug for recreational use.
And based on the significant tax dollars marijuana is generating in Colorado, it's likely other states will soon follow...
On January 1, 2014, Colorado became the first state to sell marijuana for recreational use. Early projections called for Colorado to generate $40 million to $50 million in tax revenue for the year – an amazing amount considering recreational marijuana is a brand-new market. Most stores were not even set up to grow or sell the drug yet.
But after the first month of legalization, Colorado blew away projections by generating more than $3 million in tax dollars from marijuana. And since January, marijuana sales have been exploding higher each month. The latest figures from the Colorado Department of Revenue show the state generated more than $7 million in tax dollars in July – doubling January's revenues.
As a result, the latest estimates now call for Colorado to generate more than $120 million in tax revenue from marijuana sales over the next 12 months. But this estimate is still super-conservative.
You see, only 4% of the state's population said they bought marijuana last year. And only one in every 10 adults in Colorado consumes marijuana each month. But these numbers are about to skyrocket.
As I said earlier, recreational marijuana is a brand-new market. That means so far, only a limited amount of stores have been able to sell the drug. But that's changing. A few months ago, Colorado state officials held a lottery for marijuana licenses. Since then, a few dozen stores have opened up. More are sure to follow.
In short, marijuana will soon be readily available to more Coloradans – which will increase sales and generate even more tax revenue.
And over the next year, I expect officials in other states to take notice of Colorado's windfall and legalize marijuana.
Even hard-core skeptics of legalizing marijuana are running out of reasons to oppose it. Because of the massive tax revenues it's generating, Colorado plans to invest millions of its tax dollars from marijuana sales back into its school system.
Meanwhile,
The Denver Post reported marijuana prosecutions are down 77% in Colorado. That means fewer people in jail, which saves tax dollars.
The state is also hiring hundreds of new police officers to make sure people don't drive while smoking pot, which is creating new jobs.
In short, many states are about to follow in Colorado's footsteps. Washington approved marijuana in July for recreational use. In November, people living in Florida, Alaska, Oregon, and Washington D.C. will get the chance to vote for the legalization of recreational marijuana use.
As I said earlier, nearly 60% of Americans believe marijuana should be fully legalized. That means it's likely at least some of these states will soon approve the drug.
And with more states legalizing marijuana, the industry could grow from less than $2 billion today to more than $10 billion in 2018 – a 500% increase over the next four years. But some forecasts – like the one made by
The Economist – estimate the marijuana industry could soon be worth more than $100 billion.
This creates a huge opportunity for investors to get into the next multibillion-dollar industry at an early stage.
But keep in mind, like most early-stage growth industries, there will be plenty of phony companies trying to take advantage of this trend.
If you're thinking about investing in the marijuana industry, look for companies that file with the Security & Exchange Commission (SEC), have credible management teams, and haven't recently changed their names to profit from the marijuana trend. You can read my recent essay on the marijuana stocks NOT to buy
right here.
This will be your starting point to find the stocks that stand to be long-term beneficiaries of the growing marijuana megatrend.
If you haven't looked into the marijuana trend yet, I urge you to learn what's going on today... Don't miss your chance to get in early on the next multibillion-dollar industry.