Investors have been making a fortune lately in penny pot stocks. Small-cap stocks like CV Sciences (CVSI) have exploded in value, going from $2 per share to $147 in just a couple of years. But one group of marijuana investors is beating all the rest by a landslide…
In fact, on just one of their investments, it's estimated they earned 2,940 times their money.
That's not a mistake. They didn't make 2,940% on their money… they made 2,940 times their money. That’s like turning $500 into $1.47 million -- with one investment!
Today, we'll reveal what their secret is… And then we'll show you how to get in on this secret yourself.
Progress To Date
Before we dive into this "alternative" strategy for marijuana investments, let's take a step back… Let's quickly review why this industry has been performing so incredibly well.
Penny Pot Stocks Set To Explode Like Gangbusters
You see, a decade ago, marijuana could be legally procured in just eight states, and even then, it was only available for medicinal use. Today, it can be legally procured in half the states of our country.
Not only that, but eight states now allow residents to purchase marijuana for recreational use -- which means one out of every five Americans can now possess cannabis for their own enjoyment, no doctor's certificate required..
Regardless of your opinion about the drug itself, these statistics would lead just about anyone to the same conclusion: The marijuana business is going to be massive!
Actually, it's a pretty big business already:In 2016, legal marijuana companies generated roughly $6 billion in sales. And by 2020, that number is expected to grow to more than $21 billion. To put that in perspective, the U.S. music industry generated just $15.5 billion last year.
That's tremendous growth for a brand new market. And the benefits of that growth go far beyond the results for commercial businesses… For example, according to the Marijuana Policy Institute, in Colorado in 2015, legal marijuana sales brought in $121.2 million in tax revenue, and created more than 18,000 new full-time jobs.
Investors Piling In
All this growth has created intense interest from investors. Since there aren't many blue-chip stocks in the marijuana sector yet, most investors dive into "penny pot stocks."
Now, if you have expert guidance, investing in penny stocks can work out great… But otherwise, these stocks can be very risky. Which is why some of the savviest investors are turning elsewhere:
Private marijuana start-ups.
For example, take another look at CV Sciences, which we mentioned earlier: Stock market investors could potentially have earned 73.5 times their money when CVSI peaked at $147… But the folks who got into CV Sciences when the company was still private could have done far better: They could have earned 2,940 times their money.
And that’s why interest in private pot investments is soaring. In 2013, for example, just $13 million was placed into seven marijuana start-ups… Fast-forward to last year -- and that number exploded to $205 million across 96 deals.
This is good news for pot start-ups -- and it’s great news for you. Let me explain… We believe the marijuana sector is at a major inflexion point… With more and more states leaning towards legalization, it's about to kick into high gear.
As you just learned, savvy investors looking to maximize their profits in this sector are starting to invest in marijuana companies while they're still private start-ups… And you should be looking at this exciting investment strategy, too.
This article originally appeared on Daily Reckoning.