CLSK In Cannabis

The cannabis industry is a hot topic, and for good reason. Recent regulatory changes have changed the way many look at the plant, opening the door to a quickly emerging industry with the potential to grow to be worth hundreds of billions of dollars in the coming decade. 

When looking for ways to gain exposure to this growth, you’re probably going to come up with recommendations to buy stocks like Aurora Cannabis (ACB), Canopy Growth Corporation (CGC), Cronos (CRON), Tilray (TLRY) and other big players in Canada. 

Due to their multi-billion dollar valuations, public awareness and what many perceive to be strong revenues, these stocks have seen a ton of investor interest. In many cases, that’s great. In this case, not so much. 

At the end of the day, the overwhelming investor interest has led to overwhelmingly high valuations. Some of these companies are trading at more than 200 times forward looking price to earnings ratios, all of them are trading at over 40 times earnings, and in Canada, the cannabis market is a largely saturated one. 

So, what do you do when you want to get safe exposure to cannabis? Take a look at companies that serve the sector, but have not received the recognition that they deserve. One such company is known as CleanSpark (CLSK). 

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CleanSpark And Cannabis

CleanSpark is by no means a cannabis grower, dispensary, manufacturer of cannabis or CBD products, or anything of the like. The company is more of a mix between energy and technology. It’s core business surrounds the development and maintenance of miniature power grids that source responsible energy at low prices. 

Instead of relying on the costly, unreliable, and outdated traditional power grid, customers that choose to work with CLSK receive reliable energy from a microgrid that includes solar, wind and hydrogen fuel cell power technology. In fact, in this system, the traditional power grid is only tapped into when it is cheaper to do so than tapping into these other sources. 

Importantly, the system is run by proprietary software, known as mVSO and mPULSE. The mVSO programs give large power consumers the ability to make smart energy investing decisions. Moreover, once the microgrid is installed, mPULSE uses machine learning to actively manage power purchase and consumption, purchasing power on off-peak hours when it is cheapest to do so, storing it, and using it during times when power is most expensive, ultimately expanding upon the savings offered by the microgrid solution. 

So, how does this bring CLSK into the cannabis picture?

In the world of cannabis, there’s one goal of every grower out there. That goal is to reduce the cost per pound to grow the plant. At the moment, growers are pushing to reduce the cost of growing cannabis to $300 or less per pound. However, this is challenging. 

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High and ever growing energy costs are at the epicenter of concerns of growers in the space. That’s where CLSK comes in. In fact, the company has been known to reduce energy costs for cannabis growers by more than 80%!

Recent News Suggests That CLSK May Become A Cornerstone In Cannabis Technology

In a shareholder letter released by CleanSpark in July, the company announced that it’s making big moves in the space. In fact, the company said that it has partnered with two strategic cannabis partners in order to spread its technologies through the industry. 

The company said that the partners are actively educating Cannabis companies on methods of saving energy to increase their bottom line using the solution provided by CLSK. Moreover, the company said that it expects to execute an additional partnership with a nationwide provider of cannabis solutions.

Importantly, all partners being added in order to penetrate the opportunity in the cannabis space are paid on commission. This is key as it reduces the overhead cost of marketing while creating an opportunity to only pay when sales are made. Moreover, this strategy creates a vested interest in the partners to do everything they can to quickly and effectively expand the reach of the brand.

Get In On The Leading Edge Of This Opportunity

Click the button to the right to buy CLSK stock today.

A Very Important Part Of All Of This

When investing in cannabis companies, market saturation and overvaluations aren’t the only concerns. The truth of the matter is that while some regions are legalizing the use of cannabis, many around the world have not, including the United States. 

Much of the overvaluation is based on expectations that the United States and other large, developed countries around the world will soon legalize cannabis for adult use. There’s another word for expectations… speculation!

The truth of the matter is that the cannabis industry is shrouded in speculation, so much so in fact, that it has created a large regulatory risk. Think about it, should the United States not legalize cannabis in the year 2020 like many are speculating, cannabis growers around the world are going to be hit hard!

CleanSpark is on the other end of the equation. While the company is making a splash among cannabis growers, its market in the space is far from saturated. Even if the US were not to legalize the adult use of cannabis, there would be plenty of growers here and abroad that would benefit greatly from the company’s services.

Get In On The Leading Edge Of This Opportunity

Click the button to the right to buy CLSK stock today.

Moreover, the company’s core focus is on reducing energy costs for all commercial customers, not just cannabis growers. So, even in the off chance that the recent change in tides in regulation moves backwards and cannabis growers were forced out of the picture, the opportunity for CLSK in commercial buildings helps to solidify the company’s value and shield it from any regulatory risk!

The Bottom Line

The bottom line here is a simple one. While plenty of so-called experts will tell you to put your money into cannabis growers, with ridiculously high valuations driven by speculation, and the regulatory risk associated with the industry makes me a bit nervous. 

However, by investing in companies that cannabis companies will want to use for products and services, investors have exposure to the industry’s growth should things go right, and lack the added risk associated with high valuations and regulatory speculation. In my view, if you’re interested in getting into cannabis, CLSK is the way to go!

Get In On The Leading Edge Of This Opportunity

Click the button to the right to buy CLSK stock today.

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