In recent years, NIA has received hundreds of emails from its members asking us about the marijuana industry and if we are bullish on marijuana stocks. Many NIA members have asked us repeatedly to research dozens of different marijuana companies – hoping that we would consider announcing one as our official #1 marijuana stock suggestion for the next 6-12 months.
Only 21 months ago, the 26 largest marijuana companies were worth a combined $412.78 million. Since August 2015, their valuations have soared by 860.56% to a current combined market cap of $3.695 billion!
Just like how the four largest tech companies Facebook, Apple, Amazon, and Alphabet/Google currently dominate the NASDAQ with a combined market cap of $2.364 trillion – equal to 27.2% of the NASDAQ’s total market cap of $8.705 trillion – marijuana stock valuations have been driven higher primarily by the two largest publicly traded marijuana companies: Canopy Growth (TSX: WEED) and Aurora Cannabis (TSXV: ACB).
Back in August 2015, WEED and ACB were trading at market caps of only $64.42 million and $25.71 million, respectively – for a combined market cap of $90.13 million equal to 21.8% of the industry’s total valuation.
Over the last 21 months, WEED and ACB have seen their valuations explode by a stunning 1,395% and 1,919%, respectively! WEED is currently worth $963.22 million, while ACB is now worth $519.01 million – for a total combined valuation of $1.482 billion equal to 37.4% of the industry’s total valuation!
In comparison, the next 24 largest publicly traded marijuana stocks were worth an average in August 2005 of $18.98 million. Over the last 21 months, their average valuation has increased by 445% to their current level of $103.45 million. WEED and ACB have gained nearly quadruple the rest of the industry!
The world’s most successful marijuana investor is Chuck Rifici. He was the Founder and CEO of WEED and responsible for it becoming the world’s largest marijuana company. Later, he became a Director in ACB, helping build it into the world’s second largest marijuana company.
Chuck Rifici has just become CEO of a brand new marijuana company that he plans to rapidly build into the next WEED and ACB. He believes it will become the Silver Wheaton (SLW) of marijuana.
Chuck’s new company is Cannabis Wheaton (TSXV: CBW) and it is beginning to sign streaming agreements with small/mid-sized marijuana growers that need to raise capital to expand their operations, but can’t secure financing from traditional sources. In return for providing them with financing, CBW receives an equity interest in the streaming partner at an agreed-upon valuation, along with an allocation of a portion of the streaming partner’s cannabis production yield at either a fixed price or a cost-plus price. The yield component will be for a defined period of time ranging from 10 to 99 years depending on the streaming partner.
CBW’s first cohort of streaming partners includes 14 outstanding companies in six provinces across Canada — including 2 sales license holders, 2 cultivation license holders, 4 affirmation letter holders and 6 advanced pre-affirmation stage applicants. Collectively, CBW’s streaming agreements include future capacity of approximately 1,300,000 equivalent square feet of cannabis cultivation and production capacity net to CBW by the end of 2019, according to industry recognized production averages.
This will enable CBW to quickly become one of Canada’s largest marijuana producers, but without the capital costs and operating expenditures of other marijuana growers. CBW creates an opportunity for investors to invest in a single source and gain the significant upside potential of investing in multiple licensed producers. Through CBW’s industry relationships, it has access to premiere cannabis brands around the globe looking to enter the Canadian market.
By implementing this same business strategy in the silver mining industry, SLW has become the world’s largest silver mining company with a current market cap of $9.132 billion. Since 2010, SLW has earned a cumulative net profit of $1.959 billion vs. the next nine largest silver mining companies reporting a total cumulative net loss of $2.879 billion.
We believe CBW bottomed this morning at $0.98 per share and is about to rally big from its current price of $1.08 per share. It has 149.2 million shares outstanding for a market cap at $1.08 of only $161.14 million. A market cap of $519.01 to $963.22 million like ACB and WEED would value CBW between $3.48 and $6.46 per share.
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This message is not a solicitation or recommendation to buy, sell, or hold securities. NIA has been compensated by CBW $20,000 cash for a one-month investor relations contract. Never make investment decisions based on anything NIA says. This message is meant for informational and educational purposes only and does not provide investment advice.