Investors Will Cheer When Medical Marijuana Becomes Legal
Forbes and Investing.com say it is a $50 billion dollar industry that is already developed and growing. The current regulatory process is being called stepped legalization, which is projected to continue. There are still serious issues stifling growth, however. Since federally it still remains one of the most highly illegal substances, investors are jittery that Washington may have a change of heart. Companies dealing with mail order marijuana are therefore hobbled by this, a lack of access to banking, floating in tax limbo, and the fact that they cannot claim any of the single state exemptions.
Mentor Capital Inc.’s CEO Chet Billingsley says, however, “Marijuana investors repeat the tale of Joe Kennedy in the 1930s and how he amassed a stock position before the lifting of prohibition and made a fortune from the re-legalization of alcohol.” Companies are now positioning themselves to gain market share once pot prohibition is repealed. But the whole environment makes analysis of pot stocks tricky. Investors are reminded that it was the general store owner, the bar owner, the mining supplier, and other ancillary businesses that made a killing during the gold rush. In this “green rush” financial services, software, real estate, consulting, equipment, insurance, and other ancillary businesses are also poised to do quite well for themselves and their investors. Those that avoid “touching the bud” while still developing brand identity are the companies to watch.
Billingsley says, “Investors interested in the sector may look for cash on the balance sheet to mitigate the need for the company to issue shares for financing, a low number of outstanding shares and limited new stock distribution to insiders as healthier signs in a cannabis company working to establish a presence ahead of nation-wide legal acceptance of cannabis.” The biggest obstacle is the federal ban. Once that is out of the way, marketers will successfully turn cannabis from a plant feared to a medicine that provides palliative care for those suffering from severe illnesses.