In November 2013, several lucky OTC MJ market players foresaw, and benefitted from a massive spike in "pot stock" prices due to the recreational legalization of marijuana in Colorado for New Year's 2014. On the other side were "professionals" like Alan Brochstein, who, in late 2013 advised people against participating in OTC MJ stocks, missing the largest boom the market has, and will ever experience. Post boom, Brochstein advised buying only stocks he deemed credible investments, such as his pick PHOT, which he vehemently promoted up until the SEC halted the stock mid-2014, effectively destroying any investments. But this is neither here, nor there.
What is here, or soon to be is 2016; another anticipated banner year for hemp and cannabis legalization in the United States. As if it needs mention, 2016 is a presidential election year and nearly every state has some sort of marijuana legalization or decriminalization measure on the ballot, most significant of course being California. As goes California, so goes the nation.
For several decades, California has been the point man in combating marijuana prohibition and ignorance. During that time, despite the being illegal, marijuana has been CA's #1 crop in a state that already provides over 40% of the nation's legal agriculture products. In 1996, CA was the first state to approve medical marijuana by passing Proposition 215:
Seven years later CA paved the way for retail marijuana to be sold in brick and mortar stores by passing SB 420 (yes, it was actually Senate Ballot 420):
Thirty years after Prop 215 passed and now the entire USA is exploring similar, and sometimes more progressive measures. Recently a recent federal court ruling in CA has handcuffed the DEA to prevent any federal enforcement against that state's medical marijuana facilities. Eventually, the US federal government will be forced to address this issue and, with the upcoming election year, the full-scale end of federal prohibition seems likely.
Another issue forcing the address of marijuana prohibition is the undeniable positive economic impact in states that have progressive medical and recreational policies. Despite the misguided predictions of social problems from marijuana legalization, there has been no increase in crime or work absences or whatever maladies were claimed to scare uninformed voters.
To the contrary, city and state budgets have received enormous financial windfalls from legalized cannabis. In August 2015, Colorado sold over $100,000,000 worth of medical and recreational cannabis, bringing in dozens of millions in tax revenue for that month alone. Estimates of California's current medical market are well over $1,000,000,000 annual sales. The likely range is well over $2B considering CA's population of 35,000,000+ dwarfs CO's head count of just over 5,000,000. These numbers add up to staggering amounts and the figures only include 2 out of the 50 US States! New York, Nevada, Texas, Florida…each alone is a gold mine but together, the union forms an entire mountain made of the precious metal.
Beyond the eye rolling dollars signs, are more residual benefits of a legal marijuana marketplace. Numerous jobs are created as a whole new industry becomes legalized. The cultivation, production and distribution of marijuana and hemp require specialized jobs and skills such as electrical engineering, horticulture, manufacturing or quality control just to name a few. Sales and marketing people are hired to develop brands. Farmers can now use land they have been subsidized by the government for non-use, hiring hands to grow and process hemp. State and local governments can develop MJ and hemp regulatory bodies to oversee the industry.
I could go on and on about employment benefits but there are still many other benefits like revitalization of dilapidated neighborhoods. Demand for local infrastructure drives economic growth. Empty buildings are converted into grow facilities. Barren storefronts are rented for dispensaries. Oaksterdam in NorCal is the perfect example of the economic rejuvenation in neighborhoods, now thriving with an influx of new and previously struggling, non-cannabis related businesses benefiting from the new traffic.
Perhaps the biggest benefit comes from the freedom to use the plant how one chooses; medical, recreational or otherwise. In a country that not only condones, but also openly promotes gratuitous alcohol consumption, conspicuous pharmaceutical ingestion, all the while turning its back on the death sentence of cigarettes, marijuana and hemp prohibition is unconstitutionally unthinkable in America. Fortunately, the propaganda has worn thin.
So what's to come in 2016?
For the real "green" companies like Harborside Health in NorCal or Dixie Elixirs, the horde could be unbounded sums of revenue, possible leading to IPOs on the credible exchanges or billion dollar buyouts. The aforementioned companies have been the frontline of cannabis commerce for over a decade now but they are just hitting their strides. This year, Harborside Health Clinic opened a second dispensary, expanding their reputable establishment into new markets. Dixie Elixirs, a fine purveyor of edible and drinkable MMJ products in Colorado has now expanded into California and Oregon, which will undoubtedly add value to their already substantial revenues.
Venture capital organizations like ArcView or visionaries like early FaceBook VC wiz Sean Parker recognize the potential of this industry and are putting their investment money on the table as well. Parker is fronting a large sum of cash to fund a CA legalization measure for 2016. Also aiding in the good fight is CA Lt. Governor and rising political star, Gavin Newsome (http://www.sacbee.com/news/politics-government/capitol-alert/article48618625.html).
Unfortunately, the spark in financial interest has spun off a blaze of publicly traded OTC companies fraudulently attempting to capitalize of the hot legalization issue. To date, not a single OTC stock has created any substantial revenue source within the legal US marijuana markets. These scam entities make empty promises of grow facilities, cultivation products, retail devices, non-psychoactive CBD products, or whatever topic they can hijack to generate enough interest to sell shares of the company. These companies and the executives behind the curtain have no business whatsoever in the cannabis marketplace as they often have no experience, knowledge or passion for the movement, only greed.
Speaking of self-serving, on the political front, it appears as if both (sorry O'Malley) Democratic candidates support easing prohibition. On the Republican side, there are still some Hearst era propagandists, but opposition to the progressive marijuana movement presents a catch-22 for that party. Hypocritical Republican cries of the "nanny state" can be applied to cannabis prohibition. Demanding "states rights" for one health related issue but not for medical marijuana is equally spurious. For a party that decries a large federal government, it greases the slope when asking Big Brother to help fight citizens of a state that has declared the right for safe to access marijuana.
One way or another, the cat is out of the bag and the trapped feline has shredded its former prison. Now that the politicians, financiers, supporters, and the public have seen the market potential, there is no way to halt this sweeping hemp and marijuana reform occurring in the US and worldwide. If Miami was supposedly built upon the riches of the illegal cocaine trade, imagine what kind of payday will come from cannabis and hemp reform. Someday, many of our clothes could be made from hemp. Fuels for small engines could contain hemp based additives. The only non-lethal medication can be grown in the patient's backyard. Food, diet supplement, plastic bottles….the uses are nearly endless once cultivation and research is legal. The dotcom boom will look like a child's firecracker compared to the explosive, nuke-laced powder keg of progressive marijuana reform.
The tinder will be sparked in 2016.
Check back next year for some more cannabis market insight.
Additional disclosure: Here's to a happy, safe and epic new year!