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Investing in Cannabis

Written By Briton Ryle

Posted July 30, 2014

The marijuana revolution is in full swing and moving ever more quickly toward liberalization — legally, economically, and socially.

It is becoming the greatest bloodless revolution of recent times, comparable to the revolt against Prohibition in the 1930s, the pornography revolution of the 1960s, and the still-ongoing rejection of a host of discriminations against gays and minority groups.

The marijuana revolution is also one of the loudest revolutions in history, being perhaps the first revolution waged in cyberspace by the power of the blog.

The strangeness of it all is that while the movement gains momentum, it is the world around marijuana that is changing; the plant at the center of the revolution hasn’t changed at all.

Have you ever heard a song or seen a movie and hated it? And years later, when you hear the song or see the movie again you suddenly like it? What was it that changed? It wasn’t the song or the movie… it was you.

Similarly, the marijuana revolution really has little to do with the object at the center of the whirlwind. A revolution is a turning of perspectives, a twirling of people’s points of view toward the object at its center. But the revolution is not that central object. The revolution is the whirlwind itself: a changing people.

In marijuana’s case, the substance isn’t the revolution. The revolution is the changing points of view circling around it. The plant is what it always was. But suddenly the weed has been granted a new status as people change their perspective on it.

Let’s take a quick look at three ways in which we are looking at marijuana differently and one way in which the plant has not changed at all.

Legally

With the legalization of recreational marijuana in the states of Colorado and Washington this year, the marijuana equivalent of the Berlin Wall fencing in the individual’s freedom to choose is crumbling. And there is no way to stop the fall.

“Support for marijuana legalization has grown so rapidly within the last decade, and especially within the last two years, that some advocates and pollsters have compared it with the sudden collapse of opposition to same-sex marriage as a culture-redefining event,” reports the L.A. Times.

“A better historical comparison is Prohibition,” the Times adds, “when alcohol was banned in the early 20th century. Public officials have… [taken] incremental steps like decriminalizing possession of small amounts and legalizing the drug for medicinal use.” The next logical step to take now is full-blown legalization.

Many of the same changes brought on by the repeal of Prohibition will be experienced in marijuana’s case. Just as the repeal of Prohibition put an end to many a criminal enterprise dealing in the supply of alcohol, so too will the legalization of marijuana mean the demise of many a modern gang.

Not that anything will really be changing on this front. These gangs will still be growing and dealing in marijuana as they always have. The only thing changing is the label we are putting on the activity. We’re just changing the pair of glasses we are seeing it through.

No, the real change brought by the legalization of marijuana will apply more to the end-user. No longer would marijuana use penalize you with a criminal record that follows you around for the rest of your life, often causing you to lose jobs you are duly qualified for but can’t get because you got caught years ago with one too many funny cigarettes.

“There were 658,000 arrests for marijuana possession in 2012, according to FBI figures, compared with 256,000 for cocaine, heroin and their derivatives,” reports the New York Times. “Even worse, the result is racist, falling disproportionately on young black men, ruining their lives and creating new generations of career criminals.”

Think of all the waste and ruin to individuals and families caused over nothing.

By extension, policing will also benefit as one heavy load on the entire law enforcement chain from bookings to trials gets removed — freeing up police forces, lawyers, and judges to focus on combating real crimes.

Economically

Not only did the repeal of Prohibition allow alcohol bootleggers to develop into successful legal businesses — Seagram’s being one, a history the company is honest and open about — it also re-legitimized the entire supply chain right down to the bars, clubs, and restaurants that serve alcoholic beverages.

Jobs were created, taxes were collected, and patrons saved money as the more abundant supply lowered prices. It was a financial boon to everyone involved.

So too will the legalization of marijuana give rise to a lucrative industry across multiple sectors from farming to shipping to retail and even to government tax departments.

“Six months after marijuana legalization: Colorado tax revenue skyrockets as crime falls,” headlines a July 3rd Reuters story. “In the first four months [since legalization on January first], marijuana sales amounted to more than $202 million, about a third of them recreational. Taxes from recreational sales were almost $11 million.”

Yet the total government take is much higher than that after including the multiple taxes and license fees collected all along the supply chain. “The producer is taxed at 25%,” John Evich, owner of the newly opened Top Shelf Cannabis in Bellingham, Washington, says as he starts to run down the string of taxes. “Then the processor trims it and packages it, and that’s taxed at 25%… Then, once we sell it, we have a 25% tax. So you’re at 75% tax on the product from seed to sale.” That’s enough to get even an accountant high.

But while “tax revenue has been the major selling point to local governments throughout the legalization effort… there are also numerous other economical benefits to ending [pot] prohibition, including an influx of new jobs to the market,” informs Business Insider.

It goes on to list at least 16 job categories supported by a legal marijuana industry, including: creator of edibles (yes, marijuana cooks), concentrates processor (maker of cannabanoid oils, as well as ointments and medicines), glass merchant (maker of pipes, bongs, and vaporizers), courier and delivery, security, farmer and cultivator, trimmer and packager, retailer, advertiser, and so on.

Many of these jobs will be created by new companies, but there’s also the distinct possibility that major players in other industries could broaden their product lines into the space.  Philip Morris (NYSE: PM) and RJ Reynolds may deal in tobacco, but they had an eye on the legalization of marijuana as far back as the 1970s.

According to a 2014 Time article, former Philip Morris president George Weissman wanted to examine “a possible product” if marijuana were legalized.

Though the executive said he was opposed to its use, he saw the coming social change forty years ago.

Socially

This leads directly into the third biggest change that the legalization of marijuana will trigger: social acceptance.

Those employed in the pot industry will gain a legitimacy comparable to the freedom gained by models and photographers of pornography. Users of pot will be accepted as no more criminal than tobacco smokers. And a marijuana business will be no less legitimate than an alcohol or tobacco company.

Yet the oddest thing of all is how all these changes — legal, economic, and social — come without a single change to the marijuana plant itself. Society is what is changing — people, not pot. This is an important distinction to note if only for the sake of balanced reporting and honesty.

Our world is changing, our laws are changing, our society is changing. But the marijuana plant itself has not changed a single bit, and this is incredibly important to remember.

Materially

As the marijuana revolution twirls around us, we must be honest with ourselves and admit that all we are doing is changing the glasses we are looking through. We may see pot differently, but the substance is still the same, and its effects on the human brain and body remain unchanged.

“The American Medical Assn., while calling for more clinical testing, has expressed skepticism that medicinal marijuana meets federal safety standards for prescriptions,” reports the L.A. Times. “The American Psychiatric Assn.’s most recent policy statement says, ‘There is no current scientific evidence that marijuana is in any way beneficial for the treatment of any psychiatric disorder.’ Dissenters also worry that creating a legal marijuana industry would simply be the next Big Tobacco, with legalization bringing higher rates of addiction and mental health problems.”

It is quite ironic that as the fight against tobacco products has been making enormous headway — through the banning of cigarette advertising, the printing of health warnings on packaging, and the release of countless studies clearly outlining tested and confirmed health risks of firsthand and secondhand smoke — here we are going precisely the other way on pot.

While pot should be legalized even as tobacco and alcohol are, as a society we mustn’t get so caught up in the excitement of the whirlwind spinning around pot that we lose sight of the health risks and psychological harm associated with it.

Alcohol may be legal, but it still damages the brain, heart, liver, and pancreas. Tobacco may be legal, but it still damages the throat, heart, and lungs. Marijuana may soon be legal, but it still kills brain cells.

The greatest danger of any revolution is the illusion that the object of the revolt is somehow different. It is not.

Just as alcohol remained the same after the repeal of Prohibition, so too will marijuana remain the same after legalization — it will remain just as harmful.

In any revolution, the only thing that undergoes change is the people’s view. The subject of the revolt does not change, but the perspectives upon it are forever swayed by the furor.

Joseph Cafariello