Weed on the Ballot
Marijuana is on the ballot for one reason in another in nine states this November, and the handicappers think legalization is more likely than not for most of those measures.
On Nov. 8 in Arizona, California, Maine, Massachusetts and Nevada, voters will be deciding whether to legalize pot purely for recreational purposes, following in the footsteps of Alaska, Oregon, Washington and Colorado. The measure in California, proposition 64, is the one to watch closely. If it passes, some say it will pave the way to federal-level legalization of weed. Prop 64 is well-supported too, with 60% of the state’s population in favor of the measure.
Also on Nov. 8, Arkansas, Florida, Montana and North Dakota will all be considering measures to legalize marijuana for medicinal purposes. In all four cases, usage of marijuana still would be quite restricted.
Marijuana is already legal for one purpose or another in half the nation’s states, not counting the states that will be balloting on new marijuana laws next month. Even if only a handful of those states pass or change existing laws, the tide will have technically turned from its perfect straddle right now.
And the odds are looking good. Marijuana was well-supported when it was on the ballot in some states four years ago. Now, 54% of the nation feels marijuana should be legalized nationwide, versus the 41% that feel it should be outlawed in all states.
By voting standards, those are strong odds.
The Timing Is … Better
A couple years ago, fans and followers of the pro-marijuana movement were surprised to find that marijuana stocks’ results were disappointing. As it turns out, just because it’s legal doesn’t make it a viable business. Those pesky things like taxes, competition, marketing, management and all the other boring aspects of running a business made it tough for these names to thrive as expected.
I still stand by something I said three years back:
“Hemp, marijuana, pot — call it whatever you want — it has a future, but it doesn’t have enough of a present to dive in blindly like some already have. Two years from now, some of these stocks will still be around, and some won’t. Some new marijuana names will be on the scene. Some will be well-run and investment-worthy businesses, and some won’t, just like any other industry. But I’m willing to bet that all of these stocks will be trading at lower prices at some point in the foreseeable future, ’cause hype never lasts.”
The misguided mindset isn’t skewing the picture or these marijuana stocks quite as much this time around. This time around, weed is more of an actual business, for better or worse, and the market is looking at opportunities through a more realistic lens.
In other words, with most of the hype is now in the rear-view mirror, most marijuana stocks are now a bit closer to prices that accurately reflect the industry’s true risk and reward rather than mere hope. It still wouldn’t hurt to keep them on a short leash, though.
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