The 'green rush' is on for marijuana companies
Changes in state pot laws are encouraging some cannabis-related companies to go public.
These are heady times for supporters of legalized marijuana as well as those looking to cash in on pot's growing national acceptance. This month, voters in Washington state and Colorado agreed to legalize the recreational use of marijuana for adults. And medical marijuana is currently legal in 18 states and Washington D.C.
Of course, marijuana remains illegal by federal law. But people involved in what some are calling the "green rush" are still looking at business and investment opportunities in cannabis and its production.
And as with nearly all markets, some people are willing to take the risk.
And according to an investor fact sheet for Medical Marijuana Inc. (MJNA), the current U.S. medical marijuana industry is estimated at $17 billion, with expectations it could grow up to about $29 billion by 2016.
"It was almost unthinkable 10 years ago that you would have legitimate, fully reporting to the SEC companies that were in the nature of pure plays, with positions in the medical marijuana industry," says Sterling Scott, CEO of Los Angeles-based GrowLife Inc. (PHOT), a consortium of companies that sells products for indoor growing.
Scott, a former federal regulatory attorney, estimates there are about 10 cannabis-related companies currently being traded as over-the-counter stocks. Most OTCs are relatively small and often new companies that don't yet meet the requirements to be listed or traded on exchanges like Nasdaq or the New York Stock Exchange.
He breaks down these marijuana sector firms into four groups:
- Established companies, like GrowLife, that sell equipment and expendables for the cannabis industry.
- Companies like Medical Marijuana, whose mission, according to its website, is to become the industry's "premier cannabis and hemp industry innovators."
- Groups like Hemp Inc. that are looking to develop a legal market for the industrial and commercial use of hemp (which contains only trace amounts of marijuana's active ingredient) in products such as paper, oils and cloth.
- Companies focused on the clinical, medical use of cannabis in areas such as cancer, inflammation and pain treatment.
"The safest position during the Gold Rush in California in the 1800s was to sell (miners) the equipment they needed to go out and explore for gold," explains Scott. "Our company has taken a fairly conservative position, as to the kind of things that we can engage in, because of the federal law position. And we intend, until there's a great deal more clarity on the federal side, to continue to be fairly conservative. But that's not true of all these companies."
So are these small stocks worth an investor's time? It depends on how the future plays out for the sector.
"If the new marijuana laws in Colorado and Washington… are a sign of things to come, if you're a firm that can benefit by this industry being created into a legal and viable industry, then if you can get in early enough, then those stocks may go up in value," says Mac Clouse, professor of finance at the University of Denver's Daniels College of Business.
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mairjuana jokes and non-sense aside, this is a wonderful possibilty for the US to actually produce and distribute hemp and cannabis and reap the economic rewards. it's about time we matured and recognized the impact of the laws, social views and acceptance of marijuana.
I thought the cartels were the 'bad guy' so why are we literally debating such a minute issue? take the financial stream away from entities such as cartels, end the awful misinformation and use the tax proceeds to fund public programs.
Iowa is going to drag their feet so long that we will miss out on the industrial hemp aspect of it all
and sadly ITS BEEN GROWN HERE BEFORE !
As up tight and conservative as Iowa is I cant believe that the same sex thing past and we still cant make a SAFER CHOICE and burn one freely , Instead of using alcohol for relaxation and recreation besides all the MEDICAL benefits ?
IT IS JUST A PLANT and one that cant harm anyone ? so WTF ?
It's about time! Does anyone realize that many professionals that you come in contact with everyday and depend on for medical care and many other services have been enjoying this for many years? Most people who do get up and go to work everyday and contribute to society as well if not better than those who drink alcohol and suffer with a hangover for half of the day.
And then there is the savings from enforcement and prosecution that will not be necessary for everyday use. The potential income from taxes alone is good enough reason to stop fighting a losing war on this harmless herb.
The government declares that marijuana is a "gateway drug." Influential minds, whether they be young or less educated, tend to use marijuana and say hey this isn't bad, how bad can those other drugs be? Government needs to decriminalize marijuana and fess up that they have been overplaying how "awful" it is, and keep educating the youth on the harmful, addictive traits of the real problem drugs: cocaine, heroin, the list goes on for miles.
If anyone still thinks abolishing inheritors and the corporate veil of anonymity is wrong, think again.
I have cancer and i just do not see anyone giving me this for pain
and what they are giving just puts me to sleep and makes me sick to my stomach
this is a topic that will continue for a very long time so keep on sharing your opinons no matter if people agree or not .its this very privledge we need to first uphold then we can get down in the dirt to grow our solutions one row at a time
It is cruel to let people suffer when there are drugs that help.
I also believe that the drug war is a money maker for law enforcement and the prison system. They will never want to make pot legal.
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