That’s twice the level of average inflation. And investing in the S&P 500 Health Care index would have provided a good annual return of about 10% in that period. Now compare this 6.5%-10% annual growth for health care spending to the 30%-40%- plus annual growth in the emerging cannabis market and the potential for returns. Cannabis projections makes the growth in U.S. health care spending look like a drop in the bucket. MAJOR BLUE-CHIP COMPANIES ARE ENTERING THE SPACE Big, reputable, trusted brand-name companies are starting to believe that cannabis is here to stay. Several companies – Altria (MO), Anheuser-Busch InBev (BUD), Molson Coors Brewing (TAP), and Constellation Brands (STZ) – have made major financial investments in cannabis companies. As of February 2019, these companies had a
combined market cap of nearly $300 billion. These successful, sophisticated organizations are expert allocators of capital. There are two reasons these deals were made. First, they see opportunity for investment Or they are looking to protect their turf. They expect the cannabis companies to have sales that significantly eat into their current businesses. That, too, is good for us as investors. Both these reasons suggest good things for cannabis companies. Strong sales mean there is opportunity to make money and see the value of shares rise. AVOID MOST OF THE SIXTY- PLUS CANNABIS COMPANIES In our observations of the cannabis industry, we have found more than 60 companies that are publicly traded. Most are too risky gains. This means if we invest, we are investing alongside global partners.
TOP CANNABIS COMPANIES TOTAL REVENUE Combined aggregate of 14 top cannabis companies
$8.0 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 0
$6.7
$3.9
$1.2
2018
2020E
2019E
34
March 2019
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