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.
More from Top Stocks
- Why McDonald's will top $100 again
- Will 'Car of the Year' award power Tesla?
- 800 million Facebook shares hit the market
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
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
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.
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.
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.
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!!!!!!!!
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!
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.
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The Fed may start tapering in just a few months. Here are a few of the likely winners and losers.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.