How on earth did anyone miss out on the most exciting thing to hit the stock market since the dot-com craze in the 1990s?

The whole point of investing in stocks is to be compensated for taking the significant risk of losing capital. And the marijuana industry is providing investors some of the biggest returns on the market now.

A few percentage points is not going to cut it, especially in the late stages of a historic bull run.

Big gains like those achieved by marijuana stocks in 2018 are elusive: easy in hindsight, but hard to spot ahead of time.

What was the clue that marijuana stocks would explode higher in 2018?

It can seem obvious in hindsight.

Prior to 2018, there were two very big triggers that sent cannabis stocks higher.

If marijuana was going to be taken seriously as an investment, more had to be done to get the industry into the mainstream.

For years, the medical benefits of using cannabis were well known, but there were huge hurdles to those benefits accruing to the masses.

The biggest hurdle of course was the legality of the drug.

For decades, the United States has been fighting a war on drugs, including marijuana.

You can’t gain traction in that kind of environment. But over the last few years, more and more states have begun legalizing marijuana.

On a second front, some major players, like former Speaker of the House John Boehner, have gone all in on cannabis investments.

The weight of that kind of endorsement helped legitimize the industry.

Once the momentum began, it’s been impossible to slow down.

Sure, 2018 was a brilliant year for anyone owning marijuana stocks, but 2019 will be even stronger.

And there are two massive catalysts that will ensure profits in the space.

The First Catalyst for Marijuana Stocks in 2019 – Takeovers
The masses are figuring out just how big the marijuana industry will be.

Cannabis is penetrating and disrupting numerous sectors, including food and beverage.

Traditional companies are dying to get in on the action, and they don’t care about any potential bear markets.

The shortest route for access will be via acquisition. And takeovers in the industry will mean juicy profits for pot stock owners.

For example, shares of Tilray Inc. (NASDAQ: TLRY) have nearly tripled in value this year, with recent gains solidified by a partnership with InBev.

Yes, marijuana in beer. And there’s nothing more mainstream than InBev King of Beers, Budweiser.

And takeovers aren’t the only catalyst for pot stocks in 2019

The Second Catalyst for Marijuana Stocks in 2019 – Continued Medical Use
As we head into the New Year, the number of uses for marijuana is exploding.

Sure, the medical uses of marijuana are well documented, but there is so much more potential.

“Whether to relax, relieve stress or anxiety, sleep better, or manage pain, people don’t primarily consume cannabis to party,” Money Morning Director of Cannabis Investing Research Greg Miller said. “Rather, they just want to improve how they feel. This perhaps indicates ‘recreational use’ is a misnomer.”

Research suggests medical marijuana use is growing at a much faster pace the recreational use.

“Over the next five years, sales for medical use are predicted to increase at nearly 16% per year, while recreational use sales are expected to advance at a pace just shy of 14%,” Miller said. “Both are impressive, but the edge to medical reinforces why you don’t want to sleep on medical cannabis.”

In fact, marijuana is making a huge dent in the traditional medical industry. According to a recent survey, nearly 65% of patients said they have begun replacing pain medicine with cannabis.

“Sales of traditional pharmaceutical products, opioids being the most obvious example, could be displaced by non-patentable cannabis, which is why pharmaceutical companies will be looking to invest in cannabis companies and establish their beachhead,” Miller said.

As legalization becomes complete, there’s no telling where you will find marijuana.

That alone will be a huge catalyst for pot stocks in 2019.

The story has only just begun…

— Jamie Dlugosch

Source: Money Morning