Ross Gerber: Cannabis Set for Boom with Federal Legalization

Ross Gerber: Cannabis Is One of the Biggest Opportunities for Investors Outside of AI

Ross Gerber, co-founder, president, and CEO of Gerber Kawasaki Wealth and Investment Management, has become a prominent advocate for the cannabis industry, seeing it as one of the most lucrative investment opportunities available today. While artificial intelligence (AI) has garnered immense attention from investors, Gerber believes that cannabis represents a “massive” untapped market with immense potential for growth.

A Passionate Advocate for Cannabis

Speaking at the Benzinga Cannabis Capital Conference held in Chicago on Tuesday, Gerber gave an impassioned presentation in support of the cannabis industry, offering a forward-looking perspective for those interested in cannabis investment. Known for his outspoken views on social justice and innovation, Gerber is a rare voice in the institutional investment world, where few advisors openly support or recommend cannabis as a viable investment option.

Gerber’s commitment to cannabis goes beyond financial returns. He has been a long-standing advocate for its legalization, dating back to his college days at the University of Pennsylvania, where he organized the largest pro-cannabis rally in the university’s history. This activism has continued throughout his career as he pushes for the repeal of outdated prohibition laws.

For Gerber, cannabis is not just an investment, but a social justice issue. During his talk at the conference, he touched upon the historical injustices associated with cannabis prohibition, including its roots in the Jim Crow era, and its use as a tool to disenfranchise and incarcerate people of color. According to Gerber, cannabis is the last remnant of these unjust laws that still needs to be abolished.

Cannabis: A New Frontier for Investors

While cannabis has long been a controversial subject in the financial world, Gerber believes it represents an unprecedented opportunity for investors. At the heart of his outlook is the potential for legalization at the federal level, a change he sees as inevitable and transformative for the industry.

Gerber calls the current state of cannabis advancement “stage two.” The first stage, marked by the transition of illegal cannabis operators into the legal market, was fraught with challenges. Early entrants struggled with regulatory hurdles, high taxation, and limited access to capital, which made it difficult for many businesses to survive. However, Gerber believes the industry is now entering a phase where well-run, innovative companies are beginning to emerge and thrive, despite facing numerous obstacles.

“These are the best companies that I have ever seen operated because they can exist with literally everything rigged against them,” Gerber said, noting that these businesses have managed to operate successfully even in the face of restrictive laws and regulations. Once those barriers are removed, he believes that these companies will become incredibly profitable.

Combining Cannabis and Bitcoin: A Unique Investment Strategy

In line with his belief in the long-term potential of cannabis, Gerber has positioned his clients to benefit from the industry’s growth. The AdvisorShares Gerber Kawasaki ETF is the only exchange-traded fund (ETF) in the world that provides investors with exposure to both cannabis and Bitcoin—two sectors that Gerber sees as undervalued and primed for massive growth.

This unique combination allows investors to benefit from two major disruptive forces simultaneously: the rapidly evolving cannabis industry and the expanding role of digital currencies in global markets. By offering this diversified approach, Gerber Kawasaki Wealth and Investment Management is tapping into two of the most forward-looking sectors in today’s financial landscape.

Betting on Cannabis Legalization

One of the key drivers of Gerber’s optimism for cannabis is the impending legalization of cannabis at the federal level in the United States. He believes that the current situation—where cannabis is legal at the state level in many regions but remains illegal federally—is unsustainable. As federal restrictions are lifted, Gerber anticipates a wave of new opportunities, both for cannabis companies and for investors.

The advancement of cannabis laws will unlock significant value for companies that have already established strong operations under current restrictive conditions. According to Gerber, these companies have proven their ability to thrive in an environment where “everything is rigged against them.” Once they no longer have to contend with these challenges, their profitability could skyrocket.

Gerber sees the legal cannabis industry as having the potential for explosive growth, projecting a $200 billion to $300 billion market opportunity over the next decade. With the total market capitalization of public cannabis companies currently hovering between $10 billion and $15 billion, this represents a massive increase that could provide substantial returns for investors.

Innovative Technologies Driving Growth in Cannabis

One of the reasons Gerber is so bullish on cannabis is the technological innovation taking place within the industry. As cannabis cultivation and production become more sophisticated, companies are employing cutting-edge technologies to improve the quality and consistency of their products. Gerber recently visited some of these companies and was impressed by the level of innovation he saw firsthand.

These advancements range from the use of automation in cultivation processes to the development of high-tech extraction methods that enhance the potency and purity of cannabis products. Many of these companies are adopting practices seen in more mature industries, such as pharmaceuticals, where precision and quality control are paramount.

This focus on innovation is also driving down costs and improving margins for cannabis companies. Gerber believes that as the industry matures, these innovations will enable companies to scale their operations and become more efficient, further enhancing their profitability.

Valuations Lagging Behind Growth Potential

Despite the immense potential that Gerber sees in the cannabis industry, he is quick to point out that valuations for cannabis companies remain surprisingly low. While companies in other sectors often trade at high multiples, cannabis stocks have been trading at a discount, reflecting the uncertainty surrounding federal legalization and the stigma that still surrounds the industry.

Gerber finds this undervaluation ironic, given the quality of management and the advanced technologies being employed by many cannabis companies. He believes that as more investors begin to recognize the potential of the industry, valuations will rise significantly.

For investors willing to take the plunge now, Gerber sees cannabis as one of the biggest opportunities in today’s market, second only to AI in terms of potential upside. He urges investors to take advantage of the current low valuations before the market catches up to the growth potential of the industry.

A $200 Billion to $300 Billion Growth Opportunity

Gerber’s confidence in the cannabis industry is underpinned by the sheer scale of the market opportunity he envisions. With the total market capitalization of publicly traded cannabis companies currently sitting at around $10 billion to $15 billion, Gerber sees the potential for exponential growth as legalization efforts progress.

Over the next decade, he expects the industry to grow into a $200 billion to $300 billion market. This would represent a seismic shift for an industry that has long been marginalized and underestimated by mainstream investors.

For those willing to embrace the risk and uncertainty that come with investing in an emerging industry, Gerber believes the rewards could be substantial. As federal laws change and the industry continues to mature, he predicts that the companies that have survived and thrived under current conditions will be poised to deliver outsized returns to their investors.

Ross Gerber’s optimism about cannabis as an investment opportunity is clear. While AI may be dominating the headlines, Gerber sees cannabis as an equally compelling growth story, driven by technological innovation, favorable legislative changes, and a massive untapped market. With the cannabis industry poised to expand dramatically over the coming decade, Gerber believes that now is the time for investors to take notice.

As the only ETF offering exposure to both cannabis and Bitcoin, Gerber’s approach provides investors with a unique opportunity to capitalize on two of the most disruptive forces in today’s economy. Whether through federal legalization or continued advancements in cannabis technology, Gerber is confident that the cannabis industry is on the verge of a breakthrough, and investors who position themselves now stand to reap significant rewards.