Wondering what "cannabis lots" are? They claim that they are some new type of investment opportunity that you can get rich quick with... but are they really?
What are cannabis lots? A scam?
I'm guessing you came across the ridiculously long 50 minute presentation with John Burke and Tom Gentile...
In the video presentation we are told that the SEC has recently allowed a new "special" workaround... a "new way to cash in on cannabis", which is now allowing major cannabis companies to offer these breakthrough "cannabis lots" to investors.
We are also told that every Thursday at 9:30 am they are being offered to investors, and unfortunately not many people know about them.
How much money can you make with them? Well, we are shown a bunch of extremely profitable windfalls such as these...
We are even told about opportunities such as one last year where a $500 investment in "cannabis lots" could have paid out $17,500 in just one day.
BUT... don't get too excited because much of this hype is misleading. Let's talk about what this is really all about and the real potential here...
"Cannabis Lots" Explained
They make it clear in the teaser that they are not stocks, but provide vague details on what they actually are... as expected.
"Cannabis lots" are nothing all that special like we are led to believe. They are simply options. Good old fashion options trading of cannabis stocks.
So when you buy a "cannabis lot", you are buying the right to purchase shares of the particular company at a future set price... which is what options are.
If you are new to the world of options it can be a pretty confusing concept. Here is a short video that explains what they are, how you make money with them, and compares them to normal stocks:
Their Purpose
There are different benefits that options bring to the table, and so you could say that they serve different purposes, one of which is to minimize risk (buying and selling options is, in a way, buying and selling risk in case the stock price would drop). However, Tom Gentile says that the main reason for the SEC allowing options trading with cannabis stocks is to bring in more funding.
Federally regulated banks and institutions can't provide funding to cannabis companies because of how cannabis is still illegal at the federal level... and so options trading is another way to bring some money into the new industry and stimulate growth.
It's All a Sales-Pitch
As you should be aware if you watched the entire ridiculously long (50 minute) sales video that was supposed to come across as a news broadcast... the whole thing is a sales pitch.
The opportunity is presented and then viewers are urged to buy a subscription to Tom Gentile's Cannabis Power Trader service, in which he provides members with stock option recommendations on a regular basis.
What Is Cannabis Power Trader?
Cannabis Power Trader is a follow-along subscription service offered by the National Institute for Cannabis Investors (NICI) and run by Tom Gentile that provides investment recommendations, research, analysis, updates, etc. so that members can copy professionally recommended trades without being professional traders themselves.
Subscribers are provided with:
- Weekly Alerts - Members get 3 alerts for new recommendations per week.
- Trading Videos - There will be trading videos provided on each recommended trade so that you can follow along easily.
- Profit Alerts - When it's time to sell and cash out, you will be alerted right away.
- Masterclass - This consists of 10 lessons that Tom has put together on some of his more important strategies, insights, etc.
- Forum Access - Subscribers also get access to a forum where they can communicate with one another, sharing successes, strategies, etc.
- And more
However, the opportunity might not be as amazing as it seems in the promotional material.
Can You Really Make Money With This?
In the promotional material we are told that Tom and his team of data scientists have came up with an algorithm that finds "cannabis lots" at a 90% win rate, but I'm hesitant to believe this claim... 90% is one heck of a high win percentage from some computer program.
Not only that, but I have found quite a bit of complaints from subscribers who have followed recommendations and lost money...
[Source: Stock Gumshoe]
[Source: Stock Gumshoe]
The person below even that all 20 of the recommendations they have been given have lost lost "considerable value"...
[Source: Stock Gumshoe]
What is the real win % of Tom's recommendations? Who knows... there is no clear track record publicly available... but I certainly don't think it's 90%!
Is This Whole "Cannabis Lots" Pitch a Scam?
Cannabis Lots aren't a scam... just another misleading opportunity... that's all.
Having said that, some people do call it a scam and I can understand why if they were lured in believing in the hype.
This sort of misleading sales pitch reminds me a bit of others like 7-Day Weed Contracts, American Superpower Checks, etc.
Pros v Cons
Pros
- Follow-along recommendations given (no experience needed)
- Don't need much money to get started (options generally cost less than the stock share prices)
- High profit potential
Cons
- Over-hyped marketing
- Lack of transparency
- Risk involved (as there is with any investment opportunity)
- Win rate not as good as stated
Conclusion - Should You Buy Into It?
Quick Recap:
- "Cannabis Lots" are a made-up term for promotional purposes
- The real opportunity here is to invest in cannabis stock options
- It's all a sales pitch to lure in new subscribers to Tom Gentile's Cannabis Power Trader service
- This is a follow-along subscription service where trade recommendations are given
- The win rate likely isn't as good as stated in the promotional material
So... the decision of whether or not to join is up to you. At least now you have a better idea of what exactly you are going to get involved with, if you do decide to buy in.
Let me know what you think about it all in the comment section below...