It’s 1933 (all over again)

“I think this would be a good time for a beer.”

So said US president Franklin Roosevelt in 1933, as prohibition in the US ended at last. The country had been “dry” for 13 years. The re-legalisation brought about major social and financial changes. In fact, it helped mint some of the biggest fortunes in the US.

More on that in a second. See, history looks like it is set to repeat itself. Not with booze, but with cannabis. It presents a very compelling opportunity, if you’re willing to take a risk or two (and you wouldn’t be reading Exponential Investor if that wasn’t the case now, would you?).

First, back to prohibition. Did you know that the Kennedy family built enormous wealth during the legalisation process? It’s true.

As the mood on prohibition was shifting and it became more likely the drinking ban would be repealed, Joseph Kennedy Sr – John F Kennedy’s father – made large investments in distilleries and liquor importing businesses. He understood that the sudden legalisation of alcohol would create an instantly profitable market. Owning part of the supply chain for that market was a smart move. The Kennedys made a fortune from their liquor investments.

I think a very similar situation is repeating itself right now. One by one, increasing numbers of US states have been legalising cannabis. As recently as November, California voted to legalise it (as predicted ahead of time by Frontier Tech Investor investment director Eoin Treacy).

The move towards complete legalisation won’t necessarily be easy. But it does feel like a trend with momentum. And that presents an opportunity. Many pot stocks have already been soaring. But we’re very much in the early stages. As the market matures, we’re likely to get both huge opportunity and serious volatility.

Next week Eoin Treacy will be showing you the one stock he’s recommending to play this trend.

But ahead of that, today I’ve asked Harry Hamburg to share one way the industry could develop, as tobacco firms move in. It’s a compelling case. But it’s not the only way to make money from the move towards legalisation and commercialisation. More on that next week.

I’ll hand you over to Harry – click here to read the article.


Nick O’Connor
Publisher, Exponential Investor

PS I know some people object to the idea of investing in the legalisation of a formerly illegal drug. I understand that. But equally, it’s not my place to tell you what’s right and wrong.

I’m in no position to lecture you – or censor opportunity – because some people have moral objections. My job is to share compelling and potentially profitable investment opportunities with you. This is one such opportunity. I’ll leave the moral debate to you.

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