Flower Power – Marijuana’s Promise for Investors
I have to hold my hands up now and admit that for a long time I was quite anti-marijuana and all its offshoots and derivatives. I thought consuming it in any form was decidedly harmful in numerous ways: I believed it was addictive, likely to cause illness, damaged personal relationships, interfered with work, and led to “hard” drug use. And since I believe that laws in general exist for the good of society, the fact that it was illegal made it a no-no for me. So how come today I’m a staunch marijuana advocate?
My conversion was a gradual process. It started when regulation changed, first in one or two US states, then in a few more. Media reports of those changes eventually nudged me to take notice. I didn’t need much nudging because I‘ve always been interested in legislative processes and the logical arguments behind laws. As a contrarian, I’m attracted to the arguments of smart people who have opposing views to mine. Many of the proponents of marijuana legalization had serious credentials in a wide range of specialties, and that persuaded me to examine the cases they made. Backed by financial, scientific, sociological, and medical data, they put forward strong and credible arguments. Those arguments showed that the regulated and responsible use of ethically produced and marketed recreational and medical marijuana and its derivatives is beneficial to society because those products can alleviate the symptoms of many chronic illnesses, as well as help people relax and feel better. The experts also convinced me that so much of the negative press marijuana had received was not based on the facts, but on misunderstanding the facts and misinformation. I had to concede that my long-held opposition had been misplaced.
Along with the realization that I had been wrong about marijuana, came another realization: The legal liberalization of marijuana in so many US states opened up huge new investment opportunities. The growth potential is big simply because the industry’s size has been unnaturally constrained by laws that deterred serious investors. Because commercial production had always been illegal, marijuana and its derivatives had only been produced in a relatively small and clandestine way. Suddenly it became possible to produce it openly and legally in scientifically controlled conditions in a growing number of states. For customers, that meant that for the first time they could be confident of the product’s provenance and that its quality would be consistent from day to day and batch to batch. For investors, it meant the opportunity to get in near the ground floor, so to speak, of a nascent industry with enormous growth potential.
Twenty-nine states have loosened their laws around medical marijuana, while eight states plus the District of Columbia have partially or fully legalized recreational marijuana. More are expected to follow soon. Some states have decriminalized not just its possession, but also cultivation, sale and transportation. So every stage of production from growing and processing to distributing and marketing, as well as research is ripe for investment in those states.
January 1st 2018 is an important date for the marijuana industry. On that date, California became the latest state to permit recreational sales. California had previously led the way in legalizing its medical uses, and today, annual sales of medical marijuana there are worth over $2bn. According to a report by the University of California, Davis, recreational sales alone will eventually be worth more than double that figure, making total sales of both medical and recreational marijuana worth about $7bn. With the Union’s richest and most populous state on board, most remaining fears that this trend will be halted or reversed should be allayed.
Though federal restrictions remain in place and in theory could be enforced at any time and disrupt the marijuana industry in states that have legalized it, most legal experts believe that such action is very unlikely. They cite three principal reasons. First, such moves would cause the kind of political uproar that neither major party has the stomach for especially since 64% of the American public, including a majority of Republicans, support legalizing marijuana. Second, federal authorities simply don’t have the resources to mount a serious clampdown. Third, those authorities are much more likely to overlook marijuana activity that is legal under state law and, in cooperation with state authorities, crack down on the kind of serious criminal drug activities that break both federal and state laws. Apart from that, a number of congressmen are currently drafting federal legislation aimed at decriminalizing marijuana nationwide. For those and other reasons, I have no fear of a federal crackdown or other reversal of the liberalization trend.
I’m so convinced of its investment potential that I put my money where my mouth is, as the saying goes. I have now become financially involved in a number of marijuana-related companies, including Player’s Network, Marijuana Accelerator, Cannabis Life Sciences, and Night Food and am constantly looking out for further opportunities in the industry.
French poet, novelist, and dramatist, Victor Hugo, said that nothing is as powerful as an idea whose time has come. It has taken a while, but I have no doubt whatever that for marijuana that time has finally arrived.