So-called pot stocks have been a hot investment theme for a while in the OTC (Over The Counter) market, but with articles like this one in Forbes claiming that it’s the next get rich quick idea, perhaps the incentive to legalize will become unstoppable for lawmakers:
I never thought I’d see more people invest in marijuana than smoke it.
But those investments are exactly what’s about to happen given a recent survey from some of the most influential and social analysts in the BioPharma space. In fact, according to Investing.com and our research, two-thirds (2/3) of the analysts love the potential of the marijuana industry since the $ 50 Billion market is already developed, albeit illegal. The process of stepped legalization has started and continuing prospects look promising.
Yet there are dual dilemmas facing public medical marijuana companies in the United States. First, even if it’s legal for in-state cannabis companies, no businesses are federally legalized to sell the plant or the plant’s derivatives in any shape or form. Will the federal government’s tacit overlooking of the national cannabis laws continue?
Second, public companies are by nature of their investors, interstate and qualify for none of the single state exemptions. According to Chet Billingsley, CEO of Mentor Capital, Inc. (OTC: MNTR) “Marijuana investors repeat the tale of Joe Kennedy in the 1930’s and how he amassed a stock position before the lifting of prohibition and made a fortune from the re-legalization of alcohol. Many public companies are copying this model. They are positioning to have market share and established market presence when marijuana prohibition lifts.
This makes the analysis of public marijuana stocks an indirect art rather than a financial science. Like selling picks and shovels to gold miners, there are legitimate investment purposes today in the marijuana industry by those that supply land, extraction equipment, insurance, financial services, software, consulting and the like. The establishment of brand identity, without actually “touching the bud,” as they say, is also key in establishing a footprint in advance of the lifting of marijuana prohibition. But, many other companies do little more than attach “canna” to their name and must be suspect…
[continues at Forbes]
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