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Legal Cannabis Grows Fast in the Sunshine State

Written by Jason Williams
Posted August 23, 2019

Despite conservative legislators’ best efforts to keep medical cannabis out of the hands of voters who overwhelmingly approved the law legalizing it, Florida’s legal cannabis market is growing faster than nearly any other in the country.

The state went from under 40 licensed dispensaries in April 2018 to nearly 120 by April 2019. And so far in 2019, growth has accelerated to the point of two new dispensaries opening each week.

The number of registered patients has grown drastically, too. At the start of 2018, there were about 65,000 medical cannabis patients in Florida. By July 2019, that number had shot up to over 240,000.

Even though smoking dry cannabis flower was still illegal in the state until March 2018, it’s brought in hundreds of millions in sales.

And that number is set to grow exponentially if voters have their say in 2020.

From Cocaine Cowboys to Cannabis Capitalists

After successfully legalizing medical cannabis in 2016, proponents didn’t stop to celebrate. They kept working and now are closer than ever to getting recreational cannabis put to a vote.

And now legal recreational cannabis in Florida looks like it could become a reality as soon as 2020.

Several groups have been busy gathering signatures to get cannabis legalization legislation on the ballot this year. And one of them already has more than enough for the first step of the process.

Regulate Florida has gathered over 80,000 signatures so far. That’s well above the 70,000 needed to get the amendment to a judicial review by the Florida Supreme Court.

They’ll make sure the language in the proposed amendment is up to snuff. Then they’ll perform a financial impact review to see how much it would cost the state or, on the other hand, how much the state stands to profit.

And that’s where I see this proposed legislation picking up steam...

The One Thing All Politicians Love

That’s because the potential financial impact on Florida is impressive to say the least. And it’s very beneficial to the state and its politicians.

You see, medical cannabis is great for patients and doctors. And it helps alleviate some of the strain on law enforcement. But it’s just not a huge revenue generator.

The taxes on medical cannabis are almost nonexistent. I mean, it’s a medicine. And politicians agree medicine is too expensive. So they can’t really go putting extra taxes on it.

But recreational cannabis is a massive revenue-maker for states that have fully legalized and regulated the market.

In 2018, Colorado took in over $250 million in tax revenue from the sale of legal recreational cannabis. Washington State made even more with an annual total over $400 million.

And while they may be big states by square miles, they’re tiny compared to Florida if you’re talking about populations.

Colorado claimed about 5.7 million people as residents in 2018. Washington is a little more populous with about 7.5 million.

That works out to recreational cannabis revenue of $45.65 and $55.73 per resident in Colorado and Washington respectively. And that averages out to about $50.

Florida, however, had a population of 21.3 million people as of 2018. That’s about three times more residents than Washington and nearly four times more than Colorado.

So it stands to reason that Florida’s recreational cannabis tax revenues could be three to four times bigger than those two western states.

Using the average revenue per resident from Colorado and Washington — two states with the oldest recreational markets — Florida stands to reap as much as $1 billion once its legal market matures.

And let’s be honest: If you’re trying to find the benefit of legal cannabis that both parties can agree on, it’s money.

And $1 billion in new tax revenues is a whole lot of money.

I’m not even talking about the total market size. Or how many new jobs it’ll create. Or how much personal wealth it’ll generate. Or how many fewer police hours will be spent on nonviolent crimes. Just tax revenues.

When you start to factor in all the other fiscal benefits, it’s clear that $1 billion in tax revenues is just the tip of the iceberg.

And that’s why I can see Florida pulling the trigger on recreational legalization as soon as 2020.

So, as an investor, how can you set yourself up to benefit in this potentially massive new market?

Gunning for the Number One Spot

Right now, there are numerous cannabis companies with medical dispensaries around the state. But 80% of those stores are owned by only five companies.

Two of those companies are still private, so you can’t buy shares of them. And two of them are spread out over multiple states.

But one is a pure play on the Florida cannabis market. And it stands to benefit the most from recreational legalization.

I’m talking about Liberty Health Sciences (OTC: LHSIF)(CSE: LHS), the penny stock that’s poised to skyrocket.

Liberty currently owns and operates about 10% of all dispensaries in the state. And it’s got plans to open several more this year.

The company recently sold off all its assets outside the state so it could focus all of its energy on Florida.

It’s been growing revenues at an impressive clip, too. The most recent quarter showed a 355% year-over-year improvement from the same quarter last year. And its full-year revenues have grown even more.

In 2018, Liberty took in only about $600,000. In 2019, the company sold $7.6 million worth of cannabis. That’s 1,167% annual growth. So revenues may be smaller than its MSO competitors. But with growth like that, it won’t take long to catch up.

And with the first quarter of the new fiscal year already reported, it’s pretty safe to assume that growth is going to continue — especially when Florida makes cannabis legal for all adults in the state.

Shares still trade for less than a dollar right now. But that’s all going to change as we get closer to a vote in Florida.

Imagine getting in on Canopy Growth Corp. (NYSE: CGC) when it traded for less than a dollar. Those investors scored the kinds of gains that are usually reserved for venture capitalists and angel investors.

And that’s the kind of potential Liberty Health has thanks to its concentrated efforts in Florida.

But there’s another company with operations in Florida that’s being completely overlooked. And it stands to benefit from legalization just as much as (if not more than) Liberty.

Hiding in Plain Sight

You see, this company is a multi-state cannabis operation. But it’s not the kind you’re going to hear Jim Cramer talking about on CNBC. That’s because it’s still so small that Jim and his “expert investor” buddies on TV haven’t even heard of it yet.

They’re still focused on 2018’s big names like Tilray, Canopy, and Aurora. But we all know that those names, while still being good for some future growth, have their heydays well behind them already.

The U.S. is the next frontier in cannabis investments. And those companies are mostly small enough that the Jim Cramers of the world wouldn’t notice them even if they bumped into the front door of the office.

And if they are talking about any U.S. operators, it’s only because one of those big names they learned about last year is interested in buying the company.

Let’s be honest: Jim and the guys on TV really don’t know anything about the cannabis industry except that cannabis is a plant people grow. They don’t know what adds value to the industry. They don’t know what goes into getting a plant from seed to sale.

And that’s why they — and anyone counting on them for investment advice — are going to completely miss the boat on what could turn out to be the most lucrative part of the market.

They’re not going to see the bus coming until it’s already run them over. And their followers aren’t going to know about companies like this until they hear people bragging about that 10-bagger they just closed.

But you don’t have to be one of them. In fact, you could be the one bragging about this very stock. You could be the one talking about how Jim Cramer is always late to the game and you knew about this multimillion-dollar opportunity long before he started lauding its potential.

But you need to act soon if you want to be telling tales of victorious investments and not lamenting being tardy to the party.

Start Your New Life TODAY

That’s because this company just got over the one thing that’s been holding its shares back. And now that it’s out of the way, there’s no reason this company won’t go from being an unknown $18 million firm to a household name worth $18 billion.

In fact, it’s already happening. Shares have been moving up for the past three months. And folks who listened to me when I first recommended the stock saw their money more than triple since June.

But shares are still way too cheap. They’re still under a dollar. And there’s still so much more money to be made.

So I want you to take a few moments out of your day today and watch this presentation we put together detailing the whole opportunity.

You’ll learn how this tiny company has started to corner the industry. You’ll see how fast it’s already grown and how much money is still up for grabs. And most importantly, you’ll learn how you can get invested before the massive gains really come pouring in.

Please, whatever you do today, make this your top priority. It’ll take less than an hour. And it could change the rest of your life.

Act now. Check out this presentation (or read the transcript here if that’s more your style). And start planning how you’ll spend your millions.

To your wealth,

jason-williams-signature-transparent

Jason Williams

follow basic@TheReal_JayDubs

After graduating Cum Laude in finance and economics, Jason analyzed complex projects and budgets for the U.S. Army. Then, at Morgan Stanley, he led the assistants' team for the North American repo sales desk, responsible for hundreds of multibillion-dollar trades every day. Jason is the assistant editor for The Wealth Advisory income stock newsletter. He also contributes regularly to Wealth Daily. To learn more about Jason, click here.

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