The 'green rush' is on for marijuana companies

Changes in state pot laws are encouraging some cannabis-related companies to go public.

By Bruce Kennedy Nov 14, 2012 3:02PM

Image: Marijuana (Halfdark/fStop/Getty Images)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.


"Think of it as another dot.com explosion," said Bruce Perlowin, CEO of Hemp Inc. (HEMP), in a recent press release.


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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465Comments
Nov 14, 2012 11:58PM
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Now that the cannabis is legal in Oregon I predict there will be a lot more Bigfoot sightings
Nov 14, 2012 11:58PM
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You better watch out AMERICA, remember when the WE the People voted for this before, and it passed the vote, our Government sidestepped the democratic process of WE the PEOPLE and told CALIFORNIA that our vote means nothing Because WE the PEOPLE are not smart enough to think for ourselves. come on face it our Government is much better at knowing whats best for US. as for me I trust my GOVERNMENT. the national debt is Going io be paid by our GOVERNMENT "right" JUST raise our TAXES I personally need to get a third job. so Maby I can afford a pinner from the cartel down the road...... CONCERNED CITIZEN

Nov 14, 2012 11:53PM
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I honestly don't care if they do or don't legalize pot, if it helps the economy then i'm all for it. My problem with it is that every pot head will be smoking that crap on every street corner and making the streets and neighborhoods smell awful. There should be a very strict ban on it in restaurants and public places, and under the influence while operating a motor vehicle should also be illegal, just like with alcohol. Other than that, let the pot heads have their herb...as long as i dont have to smell it and deal with the morons that use it then toke up
Nov 14, 2012 11:33PM
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Hey our economy is in the crapper so how can we make money? Lets legalize pot! Instead of coming up with real solutions we go ahead and sell drugs... Whats next? Prostitution. Yeah lets reap the rewards of putting tax payer money into sending people to rehab because thats the real investment. We are about to become a nation of pot smoking obese airhead idiots who aint got no job and nothing to do but get "suuuper high bro"
Nov 14, 2012 11:28PM
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The tax revenue generated by legalizing pot would pay off the debt of most States. Provided the politicians don't steal or squander the monies as usual. There are a lot of suburban professional types that light up on the weekend as well as the typical stoners. Let them all pay down our debt.
Nov 14, 2012 11:27PM
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This Country need to stop being so uptight. Just get it done. Legal everywhere! 

How can laws be different from State to State? And federal laws be different from that.

It's called  Selective Dictatorship.

 

         Land of the Free and the Home of the Brave            P.S. I'm smoking a bowl right now.

         We're Brave alright, but we're not Free.                        Come arrest me. Here's my Address                                                                                                                       

                                                                                                      420 High St.

                                                                                                      Wilmington De. 19809         

 

 

 

 

Nov 14, 2012 11:23PM
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Hemp is a cash crop that helped build this nation. George Washington, Thomas Jefferson and Ben Franklin all grew hemp.
Nov 14, 2012 10:48PM
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I am so tired of side effects from all of the pain pills that just require more and more of, but I live in Utah and am trying to get through school to enter the medical field.  I have had 2 major injuries that have kept me chronically injured for almost 13 years now and I am so tired of my doctor's telling me to just find some pot to medicate myself with as they warn me that pain medications will take 10 years off of my life and they have all suggested that I get off of the extremely dangerous pain pills soon or I will die very young.  It is impossible to win in these conditions for me, and yet the federal government is forcing me to use horribly dangerous medications so that I can get up and out of bed after 20 years of construction work, and all I want to do is go back to work in order to be a contributing member of society again instead of being forced to use taxpayer money to barely eat every day.  I paid a ton of taxes for years, but 6.500$ a month isn't worth it after you have killed your body as a young foreman and my doctors won't allow me to return to construction nor will my body.  I cannot believe that I am not able to choose the way in which I medicate the suffering that I am going through because the federal government is standing in the way of the constitutional right that a doctor has to medicate a patient in the way they deem most beneficial. 
Nov 14, 2012 10:32PM
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Man made beer.... God made pot.... Who do you trust ????
Nov 14, 2012 10:29PM
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AHHHHHH BRING  IT ON,LET THE PEOPLE OF ILLINOIS MOVE AHEAD,AS THE SAYING GOES "MAN CREATED BOOZE,GOD CREATED WEED,WHO WILL YOU TRUST"
Nov 14, 2012 10:24PM
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You think it's going to be cheaper if it get commercialized?  I want to know what you are smoking because I want some of that!  I don't smoke often... but when I do... I prefer Acapulco Gold with my Dos Equis!  Stay high my friends and don't forget to share your joint with the women.
Nov 14, 2012 10:18PM
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This country is headed for the top of a big pile of ****!  Between the legalization of this and homosexual marriages, living in this country is becoming a complete waste of time.  This use to be a great country.
Nov 14, 2012 10:13PM
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The  moneys great and the industry will grow at a incredible rate but whats to become on the near 1.5 million people nation wide who are in jail and prison with marijuana charges only? How do we deal with the business of putting people in jail for money and privately owned and operated prisons. When do we stand up for our fellow citizens who are discriminated against because they smoked, grew, possessed and or provided this plant to people who need and want to use marijuana instead of taking pharmaceuticals? How do we react to the fact that people with marijuana charges do more time than murderers and rapist's in certain states? I only ask this as I myself will be self surrendering tomorrow to the federal B.O.P.. for marijuana possession and intent to distribute a plant. A plant that was the textile used to create and print our constitution and bill of rights on!  When will we as Americans say enough is enough and storm our own Bastille  standing up for what is right.......... just food for thought my friends,  see you on the flip side in about 16 - 28 months!!!               Set the captives FREE!!!!!!!
Nov 14, 2012 10:11PM
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Which illegal drug will be next to be legalized? If we as a civilization cannot learn from our past history with this stuff then we as a nation really have issues.

Nov 14, 2012 10:04PM
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legalizing weed is ok but never legalize cocaine, meth, nor herion period.

 

Not that I still smoke weed but to me its less harmfull than alcohol and cigs.

Nov 14, 2012 9:58PM
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20 years ago, a co worker of mine got stomach cancer. He was prescribed marinol, which did not help. Someone I know got him the real thing, he went into his bedroom and awhile later came out much more relieved of his pain. This man never smoked pot in his life and was amazed what it did for his suffering. He was able to eat again. I witnessed this. 6 months later he was dead. Pot relieved a lot of his suffering.

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.

Nov 14, 2012 9:57PM
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LEGAL IN WASHINGTON D. C. AND STILL A FEDERAL CRIME............TALK ABOUT AN OXYMORON. WHERE DO ALL THE MORONS CREATE THE FEDERAL LAWS?
Nov 14, 2012 9:53PM
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It's time for Washington and all politicians to SHUT UP and Roll up.

Power to the people give us what we want.

Send a letter to that monkey in the White House That is land is our land, this land is your land!!!!!!!!

Nov 14, 2012 9:48PM
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We The People want Hemp LEGALIZED!

Here is a link for a petition to the White House calling for the legalization of Hemp.  It is true that this wonderful plant can rebuild our economy by providing jobs in agriculture, bio fuel production, clothing, cosmetics, food, pharmaceuticals, building products, furniture, paper products, synthetic plastics.......and the list goes on.  There is  no end to the products that can be produced with HEMP.  Hemp is not a drug.  Marijuana smokers do NOT smoke Hemp...PERIOD!  There is absolutely NO REASON that it should be illegal.  America should be a $ea of green for everyone, in more ways than one.

Please sign the petition today!






Nov 14, 2012 9:41PM
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To brutisbear5;

 

Sorry, when money is spent legally, government taxes it. People go to prison for tax evasion. And tax evasion is a VERY SERIOUS crime to the government. Especially as compared to silly old illegal drug use.

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