On the federal level, marijuana, hemp and all types of cannabis plants and their products remain illegal. However, the tide here is turning, and several states already consider medicinal and even recreational use as legitimate and lawful within their borders.
And as that movement expands, there will be increasing opportunities in the publicly traded companies that call the industry home.
Why Cannabis Is Exploding
The cannabis plant produces more than 100 compounds (called cannabinoids), though most people know about just one. THC, short for tetrahydrocannabinol, is the psychoactive component that gets the user high. That is the drug that launched a counter-culture and the government campaign against it. It is also the recreational component.
Those a bit more advanced in their cannabis terminology know about the medicinal component called CBD, short for cannabidiol, and it has virtually no psychoactive component at all. It does not get anyone high. Rather, it works with the human body to ease symptoms of disease and aging.
Both compounds work with receptors in the human (and mammalian) nervous system. Not surprisingly, these receptors have the name endocannabinoid system (ECS), which regulates day-to-day bodily functions.
The name is a bit of a chicken-and-egg story here because ECS receptors are perfect matches for phytocannibinoids naturally contained in the cannabis plant. And when the human body does not produce adequate amounts of its own ECS neurotransmitters, the plant supplements what is already there.
The distinction between cannabinoids that get you high and cannabinoids that help you heal is huge. In fact, making the public aware of this is one of the callings of CB1 Capital, a money manager specializing in cannabis-based, publicly traded investments.
Scientists already know the cannabinoids found in cannabis are identical in action to what our bodies produce. They also believe that a decline in the ECS is probable as we age, which may be responsible for a host of currently unaddressed medical conditions.
Todd Harrison, founder and chief investment officer of CB1 Capital, who also founded Minyanville Media and previously was a hedge fund trader, says the perception of cannabinoids in the public arena is wrong. Cannabis is an ingredient that will end up in many mainstream products that people use.
“Legal weed,” as some call it, has the wrong connotation. “Tomorrow’s cannabis consumer won’t just smoke it; they’ll drink it, eat it, rub it on, take it as a pill, or wear it as a patch. They’ll take bubble baths in it.”
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