Crazy volatility hit the cannabis markets last week after Attorney General Jeff Sessions shifted the Department of Justice's stance toward on pot.
Previously, the DOJ was restrained by what's known as the "Cole Memo". An internal directive to not pursue cannabis companies operating legally according to state laws.
When news broke that Sessions was rolling back this measure, pot stocks took a major nose dive.
But is the sky really falling for the emerging marijuana market?
No.
First off, the change in DOJ policy might not be as bad as it seems. The new policy does not state that the DOJ definitely will go after pot, only that district attorneys have the discretion to do so if they choose.
Law enforcement has limited resources and district attorneys will still have to focus on crimes that are doing the most harm first.
Will that mean they target state-legal, regulated, compliant businesses?
I suspect not.
If the DOJ does decide to go after cannabis, it will likely be limited to unlicensed outfits, involved in production, distribution or sales. Because even in states with legal marijuana, a good deal of supply still comes from unregulated black market operators.
Paradoxically, cracking down on these elements should strengthen licensed, reporting businesses in states where marijuana has legality.
Furthermore, there appears to be an enormous political backlash forming. In Congress, even Republicans are complaining about AG Sessions' surprise policy shift.
The announcement might end up being the catalyst that Congress finally needs to change the federal law.
I firmly believe there will be no going back to the old ways. "Canna-businesses" have become too big, benefit too many people and bring in too much tax revenue to go away.
Biotechnology is one sector that should still offer a steady wave of profit opportunities.
These companies are regulated much differently by the government. Even if Sessions goes after growers and dispensaries in the U.S., pot focused biotechs are protected by the FDA's regulatory aegis.
Canadian companies are benefiting greatly from their own government’s pro-pot policies.
If you missed it in previous alerts, Canada is going fully legal in July.
The upside opportunities are going to be enormous.
If you've been following my alerts through 2017, you know I've been well ahead of this trend.
Now, as Jeff Sessions shakes up the U.S. pot market, I expect to see even more money rotate into pot companies based in Canada.
As latecomers pile into Canadian pot plays, we're going to see the value of these investments soar.
And this is just the beginning.
Pot investing has still not reached the mainstream yet. There's plenty of room for more markets and more profits once the dust settles from AG Sessions' recent announcement.
Of course, only time will tell what's in store for U.S. pot.
But in the meantime, you could still make substantial profits right now in Canada's booming pot market.
For Tomorrow's Trends Today,
Ray Blanco
The Daily Reckoning