As I write this, there is a hurricane named Dorian marching on legs of wind and rain toward my home in Florida. For folks in harm’s way, it’s a time to stock up water, batteries and hurricane supplies.
For investors, it’s a time to buy The Home Depot (NYSE: HD) and Lowe’s (NYSE: LOW). That’s because those are the stores where just about everyone goes for hurricane supplies.
There’s something else people stock up on during major weather events.
And even if this item isn’t essential to your own survival as you ride out the storm, it could help ease your mind about your money — no matter where you live.
The National Hurricane Center started tracking Dorian on Friday. And Florida was declared to be in a state of emergency yesterday (Wednesday). Let’s look at what’s happened to Home Depot and Lowe’s during that time.
Here’s a performance chart comparing those two against the S&P 500 …
The red S&P 500 line is on a roller coaster lower, like the other major averages. But Home Depot (the green line) and Lowe’s (blue) are shrugging off market nervousness.
Investors look pretty certain that those companies will be selling a heck of a lot of plywood, nails, water, batteries and more.
If you trade stocks a lot, maybe you bought Home Depot or Lowe’s on the news on Friday. If so, good for you.
But plenty of people here are spending big bucks somewhere else. This brings me to the Home Depot(s) of marijuana. And by that, I mean cannabis stocks that could ring the cash register ahead of the coming storm.
What do big storms and cannabis have in common? Well, we know that big storms boost cannabis consumption.
Remember the “bomb cyclone” storm that pounded the Midwest in March? Advance warning of that blizzard sent customers surging into Denver-area cannabis shops. As a result, sales spiked 10% to 27% at Denver-area cannabis retailers in the days leading up to the storm.
Now, Dorian is on its way to Florida …
Sources: Marijuana Business Daily from Flowhub & Headset data
People here are already gathering around the watercoolers, discussing the storm. It is a big deal.
So, if cannabis consumers in Florida follow the example of those in Denver, which companies might pull off Home Depot-worthy pot sales?
Well, you should know that Florida caps the number of dispensaries for each company at 35. This number goes up as the number of eligible patients in the statewide database increases, and the cap comes off in April of next year.
This hasn’t stopped various companies from suing to get more dispensaries now. Because the demand for cannabis among Florida’s elderly population is soaring!
Indeed, Florida is the fastest-growing medical marijuana market in the country. This is primarily due to soaring interest among its senior population.
More than 250,000 Floridians have signed up for the medical marijuana program. Approximately 609 people become new medical marijuana patients in the sunshine state every danged day.
4 Picks to Ride the Storm
We are entering prime hurricane season — it runs from now through mid-October. I’ll bet you dollars to driftwood this isn’t the only hurricane to pound Florida’s shores this year.
There are 13 licensed cannabis companies in Florida, but not all of them are publicly traded. And some, frankly, I wouldn’t buy. I do have four ideas for you.
Trulieve (OTCQX: TCNNF) has a market cap of $882.9 million. It has 31 dispensaries in Florida.
Curaleaf (OTCQX: CURLF) has a market cap of $3 billion. It has 25 dispensaries in Florida. It’s also the biggest multi-state operator (MSO) in the country, with 45 retail locations, and is getting bigger in a hurry.
Cansortium (OTCQB: CNTMF) has a market cap of $181 million. It’s the parent company of Fluent, an MSO with 16 dispensaries in Florida.
Liberty Health Sciences (OTCQX: LHSIF) has a market cap of just $97.3 million. But it’s big in Florida, with 16 dispensaries already open and at least six more on the way.
One of these companies is already recommended in my Marijuana Millionaire Portfolio. Two of the others are already in my personal investment portfolio. All of them have potential.
Cannabis stocks have experienced a tough year … so far. But seasonally, cannabis stocks rally in the fall. And then there’s the fact that there’s a storm a-brewin’.
This might blow up some serious profits for the right companies. Investors are already betting on Home Depot and Lowe’s ringing the cash register. I believe select cannabis companies stand to make a lot of green, too.
If you’re in Dorian’s path, be careful and get to your preferred home-improvement and grocery stories while there’s still time to prepare.
When you’re safe and settled, consider stocking up on the types of investments we talked about today. Those should pay off long after the winds have calmed and the waters have receded.
All the best,