May 16, 2018
The marijuana industry has already brought in billions of dollars in tax revenue and created more than a hundred thousand jobs in the United States, but what makes that so intriguing is the fact that its use is not currently legal in the country. That may change sooner than later, though, as President Trump recently assured a Colorado senator that the federal government will be hands off when it comes to the 29 states that have voted to legalize marijuana on either a medicinal or recreational level.
Whether you’re for or against its legalization is your business, and I am not here to try to change your opinion. That said, I do believe this is a space with a lot of investment potential. According to New Frontier Data, marijuana sales (both medical and recreational) will reach $11.7 billion this year and climb to $25 billion over the next seven. To put that in perspective, last year wine sales brought in $60 billion. And if my assumption that marijuana will be federally legalized in the next decade is correct, I suspect those sales figures will end up being much higher than anticipated as there will be a major shift from the consumption of alcohol to that of marijuana in the younger generations.
As many of you know, I am often on the road, and recently I found myself in Kansas City for a wedding before shipping off to Austin to speak at the FUND Conference on Thursday. Not surprisingly, the topic of marijuana has come up a few times.
I was walking to a restaurant the night before the wedding and got stopped by a millennial who asked me to sign a petition with the goal of getting the legalization of medicinal marijuana on an upcoming ballot. Unfortunately I am not a Missouri resident, so I was unable to help him, but I did bring up the encounter to another group of millennials once I got to dinner. The conversation we had didn’t shock me, but I did think it was worth discussing.
While there were some mixed feelings about the legalization of marijuana recreationally, every single person at the table was for it on a medicinal level. When I asked why, they all referenced someone they know who is suffering or has suffered from a medical issue and found that their best treatment was medical marijuana. I have also seen the benefits of medical marijuana to someone with an ailment and it’s actually the number one reason why I back the movement.
I think it’s clear that the marijuana will be a major focus in the next presidential election. I suspect candidates will be jockeying for the millennial vote, as a recent study shows that 84% of millennials believe marijuana should be legalized. More than 87% of millennials think marijuana is safer than alcohol and 85.6% say they believe it is actually good for your health. To prove that the study was not one-sided, only 54.4% think marijuana should be allowed to be consumed in public.
The bottom line is this – the marijuana industry is and will continue to be controversial for years, but by the time it becomes widely accepted the big money in the stock market will have already been made. I don’t want to look back with regret. When a sector is in its infancy, there will be times when the doubters will convince people that this was simply a fad and not a real trend. But let me assure you, this is anything but a fad. Now is the time to buy for long-term investors who are willing to ride the inevitable ups and downs along the way.
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