It is getting a little scary in the cannabis industry. With the recent revelation that the U.S. Attorney General is ready to hand over enforcement of the still-affect-federal marijuana ban to U.S. Attorneys in the states, no one involved with marijuana stocks know quite how everything is going to play out. The federal worker bee attorneys could be loath to take on a huge and growing industry with a lot of tax revenue and strong public opinion its favor. But you can never put the current administration into a box and predict what they are going to do.
California just legalized weed, as the year turned to 2018. Recreational cannabis is now legal in the state and lots of businesses have been planning for this moment. There are weed restaurants, weed stores, weed beverage makers and that is just the beginning. Just as in Colorado and Washington state, the ancillary business such as legal firms specializing in marijuana and cannabis advertising are set to spike as well.
What does this mean for investors? Well, marijuana stocks can be very volatile which may be an asset if you trade with frequency in mind. There is very little to dissuade day traders from getting into the cannabis trade. But long term investors should be very careful about where they put their money and how they choose marijuana stocks to buy.
Even though the federal government is rescinding policies from the previous administration, making it easier for federal prosecutors to go after producers in legal weed states, there are still a lot of hurdles. Cannabis legalization is popular in these states. That is why the legalization movement took hold and made it past all the political roadblocks in California and other places. There is not a lot to gain by going after legitimate business that produce a lot of tax revenue for local and state governments.
The current administration links marijuana activity with serious violent crime, which is a stretch at best and intellectually dishonest at best. Federal law still puts marijuana in the same classification as heroin. Attitudes and norms have changed, given more widespread education and information about the real effects of pot and the federal government is very slow to react to change. Generally the states lead the way,.
And the six states in the Union with legal recreational marijuana are doing just that. There is very little. Business in California are going along with long-held plans to expand their business and fill a demand in the marketplace. There is very little to suggest that any administration could turn back the tide of cannabis acceptance. There will be road bumps and delays, but the writing’s on the wall. Marijuana stocks are here to stay.
So the answer is to explore every nook and cranny of the marijuana industry before jumping in and investing. The opportunities could be in cultivation innovation or in ancillary business like distribution and media companies that put out cannabis publications. The world of marijuana stocks is open for business and there is not much that can change that.