The cannabis industry is breaking new ground… and making investors a lot of money.

Each month, more and more U.S. states are legalizing cannabis for both recreational and medical purposes. After last year’s mid-term elections, Michigan became the 10th state to legalize recreational marijuana. And so far, medical marijuana is legal in 33 states and Washington, D.C.

While marijuana is still illegal in the U.S. on the federal level, that’s likely to change soon…

In December, President Donald Trump signed the U.S. Farm Bill into law, which legalized hemp (a plant in the same family as marijuana).

And the potential profits of full legalization could be huge. In October, Canada officially announced it was legalizing marijuana. Many estimate this will bring billions of dollars of sales to Canadian pot companies in the years to come.

The excitement in pot stocks is justified. Today, I’ll share another reason why – this one from the business world…

According to Grand View Research, medical and recreational cannabis sales are projected to skyrocket to more than $146 billion by the end of 2025. It may eventually surpass both the soda and tobacco industries… This industry is still in its infancy, with a lot of room left to run.

Importantly, major blue-chip companies seem to agree. And it’s one reason we could be entering the early stages of a marijuana boom this year.

Over the past several months, we’ve seen massive deals to consolidate the industry.

As my colleague Thomas Carroll summed it up recently…

Big, reputable, trusted brand-name companies are starting to believe that cannabis is here to stay. Several companies – Altria (MO), Anheuser-Busch InBev (BUD), Molson Coors Brewing (TAP), and Constellation Brands (STZ) – have made major financial investments in cannabis companies.

As of February 2019, these companies had a combined market cap of nearly $300 billion. These successful, sophisticated organizations are expert allocators of capital… They see opportunity for investment gains.

Thomas was one of the most respected and longest-serving health care analysts on Wall Street before he joined us at Stansberry Research. Lately, he’s got his eye on the potential boom in cannabis stocks – for good reason.

These partnerships show the successful, sophisticated blue chips believe a boom is coming. They’re staking real money on it.

That’s good for investors. It also means certain cannabis stocks could receive a major tailwind if more deals follow…

The benefits for the blue chips are certainly attractive. For example, cigarette giant Altria’s deal helps diversify the company away from cigarettes – which more Americans are shunning – and toward a high-growth product like marijuana.

And while Molson and Constellation don’t face Altria’s growth challenges in their core businesses yet, they’re heading off the problem now by striking deals with their potential competitors (as well as locking in new avenues for growth).

Meanwhile, blue-chip businesses have the infrastructure to help cannabis companies scale. When marijuana becomes legal in the U.S., they will be able to distribute cannabis products across the nation – without huge amounts of capital investment.

It’s a true win-win arrangement. And again, it shows what the market’s established giants believe is coming…

They’ve decided to get ahead of the shift, rather than lose sales to the upstarts.

I like the long-term prospects for the cannabis industry. And right now, the blue chips agree.

So today, while you shouldn’t fall for the hype in certain cannabis investments… that doesn’t mean you should avoid this up-and-coming sector.

This could be the year we see the cannabis industry begin to boom in earnest… and the worthy cannabis companies start to rise to the top.

Here’s to our health, wealth, and a great retirement,

Dr. David Eifrig

Source: Daily Wealth