Support For Marijuana As Pain Killer: How To Keep It Real

Today's headline-grabbing post from fool.com (see link below) may well attract yet more readers to the medical marijuana fold but we do need to ask precisely what is meant by every step forward regarding medicinal marijuana. We should know by now that just because on a certain day, something is seen as good and beneficial, it doesn't mean to say that the next day, things will be the same. That certainly applies to marijuana and the whole issue may well be drastically influenced by coming elections in the US. So having achieved so much progress towards recognising the medical qualities of marijuana, especially as an analgesic, how do we maintain that progress in a world where the media can change your mind every minute? The answer lies in maintaining factual reporting - no hints, suggestions or suppositions but cold hard indisputable facts. Only then can indisputable things about marijuana be said. It is not surprising that the first genuine breakthrough in pain treatment in decennia has been so widely welcomed but we must always be careful that the facts remain paramount and are not exaggerated by 'wishful thinking' because that's exactly what opponents of medical marijuana are waiting for.

Public Support for Marijuana Just Hit an All-Time High
 Sean Williams (TMFUltraLong) Oct 29, 2016 at 9:12AM

Though marijuana is no longer a taboo topic, and industry expansion appears likely, investors should remain cautious.

The sun is shining on the marijuana industry.

Put plainly, you'd struggle to find an industry that's growing as consistently fast as marijuana. While it's not uncommon to find an industry that has double-digit growth potential for a few years, investment bank Cowen & Co.'s estimates suggest the legal cannabis market could expand by nearly 24% per year through 2026 to about $50 billion. Those are numbers that are hard for businesses and investors to overlook.
Public support for pot soars

It's what's going on behind the scenes that's truly remarkable. In a relatively short period of two decades marijuana has been transformed from one of the most taboo topics to a substance that's now recognized as medically legal in half of all U.S. states. It's also legal to purchase certain amounts of recreational marijuana in four states -- Colorado, Washington, Oregon, and Alaska -- along with Washington, D.C., for adults ages 21 and up.

The real impetus for change in the cannabis industry has been the rapidly shifting, and improving, public opinion toward the drug. According to the many polls Gallup has conducted over a nearly five-decade period, it's only since the mid-1990s that the public's opinion of marijuana has shifted. In 1995, just 25% of Gallup's respondents wanted to see pot legalized nationally. By 2005, that figure had risen to 36%, and by 2011 it touched 50% for the first time. With the national pollster releasing its 2016 marijuana poll earlier this month one thing is clear: marijuana is no longer taboo.


Image source: Cannabis Culture via Flickr.


According to Gallup, support for legalizing marijuana nationally has now hit 60%, an all-time high (no pun intended). Growing public support could put pressure on the legislatures of the remaining states that haven't legalized marijuana -- especially those that don't have the initiative and referendum process -- to reconsider their position on medical cannabis. As a reminder, support for legalizing only medical cannabis is even higher, with a 2015 CBS News poll putting favorability for such a measure at 84%.

A recently released marijuana poll from the Pew Research Center would appear to concur with Gallup's findings. Nearly three weeks ago Pew Research pegged support for legalizing marijuana at 57%, an all-time high, with just 37% preferring it remain illegal. Comparatively, 60% of respondents wanted it to remain illegal just one decade prior.

Even with the U.S. Drug Enforcement Agency rejecting two petitions to reschedule marijuana in August, the industry looks as if it could continue to grow on the heels of strong support from the American public.
One thing for opportunistic investors to keep in mind

Growing support for marijuana might have opportunistic investors thinking that buying into the cannabis industry is a smart move. However, certain aspects of the industry continue to make it anything but investor-friendly.

To begin with, there aren't many investable marijuana stocks. With the exception of GW Pharmaceuticals, which has discovered more than five dozen cannabinoids and is attempting to use those cannabinoids to effect positive biologic changes in the treatment of epilepsy, cancer, and type 2 diabetes, to name a few ailments, there aren't any other pot stocks trading on reputable stock exchanges. Although we're witnessing improved reporting standards for over-the-counter stock platforms, those standards still aren't the same as if they were listed on the NYSE or Nasdaq, which makes finding accurate financial information somewhat spotty. Not to mention, nearly all marijuana companies are currently losing money.

The cannabis industry also faces a number of disadvantages that are liable to turn investors off. For example, pot companies are having a very difficult time accessing basic financial services from banks and credit unions. Though many states that have legalized medical and/or recreational marijuana have provided a workaround for banks and credit unions to legally provide a checking account or line of credit to pot businesses, the fact that banks are insured by the federal government could theoretically expose them to prosecution in the future. Remember, cannabis remains illegal at the federal level. This means most banks (about 97%) have remained on the sidelines, which is forcing cannabis businesses to deal solely in cash -- and cash creates a major security concern.

Additionally, marijuana companies are contending with a major disadvantage come tax time. The Internal Revenue Service disallows businesses that sell illicit substances, such as marijuana, from taking normal business deductions. It essentially means pot businesses are paying tax on their gross profits instead of net profits; or in other words, dramatically overpaying on their taxes compared to "normal businesses." Having to hand back a lot of would-be profit to the federal government isn't exactly ideal from a business perspective.

Thus, while the marijuana industry looks poised for continued expansion at the state level based on improving public support, the fundamental factors that are behind the scenes still indicate that investors would be better off sticking on the sidelines.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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