Is Brink's Company (NYSE: BCO) a backdoor cannabis play?

There are several off-shoot players in the cannabis industry that an investor can own without the high risk of owning cannabis stocks. Cannabis is not yet a profitable industry and will likely suffer a lot of growing pains as the players jockey for superiority. But investors can get a piece of the action by “dancing around the edges” without owning the stocks of Canopy Growth, Medmen, Cronos, Tilray, and the numerous other pot-players.

Beverage companies are looking at cannabis infused drinks. Companies such as Miracle-Gro provide for the growing needs of cannabis companies. And then there are companies that are channels for CBD type products such as vape oils and cannabis infused candies.

However, when an investor looks at cannabis, he or she should see green; and I don’t mean the color of the weed. I mean the color of cash. There are two aspects of the cannabis industry that one must consider, and both of them have to do with assets. Cash and product.

Who knows where this industry will take the casual recreational user and the necessary medical user, but one thing is sure, investors know where the industry leads as more and more states and countries legalize its use.

That is why Canopy Growth Corp., who already has a cash source through Constellation Brands, Inc. (NYSE: STZ), has opted for armored trucks to provide secure logistics and cash management services. I spend a couple of years working for the company Brink’s Co. recently acquired and I know that secure cash management services means money vault operations and logistics means the transportation of a highly valuable asset.

Playing the off-shoots reduces the risk associated with cannabis stocks because typically, companies that partner with pure cannabis plays have other revenue streams that can absorb any short term volatility. The trick, of course, is determining which off-shoot company has the best association. 

Brink’s Company handles millions of dollars of cash assets every day and billions pass through their money vaults every year. This means a cannabis play only increases that volume.

If you decide that the transport game is the way to play cannabis, then Brink’s Company might very well be the right one. Brink’s Company offers vaulting and inventory management for a variety of commodities, including precious metals, banknotes, numismatics, personal data, and now you can add cannabis.

It is important to do your due diligence before investing in any company. Once you have made the decision to expose your financial assets to the risk associated with cannabis, you have a lot more homework to do. The industry is so new that many of the risks are still undiscovered. Imagine a fire at a storage facility… all of your assets would go up in smoke.

Don’t over commit any financial resources to pursuing the profit of pot. All of these companies are speculative and should not make up a significant portion of your portfolio. Placing a side bet on the off-shoots can provide a small amount of security while providing you some exposure to the potential upside of the industry.

Let me say one more thing about Brink’s and the armored car industry. Fundamentally, it is a transport stock. The only difference between armored car services and the other carriers in the transport industry is the type of cargo that is being transported. So, if you are interested in investing in the transportation industry, Brink’s Company might be a company at which you look. It may be classified in the Industrial Sector and the Security & Protection Services Industry, fundamentally, it is a transportation stock.

If investing in the off-shoot players in the cannabis industry intrigues you, why not consider making some green with those who provide vaulting and inventory management for the greenest industry around.