The profit gained from investing in marijuana stocks can be enticing, but as any other industry is, it can be quite risky. The current federal administration headed by Trump could effectively try to force anti-marijuana laws into states that have legalized the plant. Falling prices due in part to the commoditization of cannabis also concerns the industry. One of the largest players in the industry (Canadian marijuana market) faces potential failure in its efforts for national legalization of recreational marijuana.
So, with all this information, is there a safe way to make money from the marijuana industry? CNBC’s Jim Cramer has suggested an alternative. His suggestion is to buy shares of Brink’s Company (NYSE: BCO). Is this one stock really the least risky way to invest?
Why Brink’s? Brink’s is the number one provider of services for transporting cash securely. Brink’s trucks are synonymous with armored transportation of money and valuables. In addition, the marijuana industry is almost entirely run on cash.
The reason marijuana related companies cannot deal in anything but cash goes back to a 1970 federal law known as the Bank Secrecy Act. This piece of legislation stated that all financial institutions regularly monitor their customers’ accounts for various forms of potential criminal activity. Banks are also prohibited from doing business with customers who engage in criminal activities. Because marijuana is still federally illegal, banks cannot do business with companies that have any part in the industry.
Brink’s is not a financial institution, so therefore it can deal with marijuana-related businesses without any of the worries that banks face. Brink’s can provide both money transportation as well as vault services— just what these companies need.
Brink’s stock has followed a similar uptrend to the marijuana stock curve over the last 12 months with its shares soaring nearly 140% since July of 2016. Now one could say that this has nothing to do with the soaring of the marijuana industry itself, but it is a strong coincidence worth researching.
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | new@marijuanastocks.com
