Legal pot is 1933 deja vu

Pot is hot. And it’s going to get hotter.

Today, either recreational- or medical-use marijuana is legal in 28 states.

And given pot’s resounding victory this past November, when four states approved recreational use and another four states legalized medical-marijuana measures, investors and entrepreneurs of all sizes and shapes have been looking to cash in.

Trends are born, they grow, mature, reach old age and die. The marijuana legalization trend is only in its infancy and can be compared to the end of Prohibition in 1933.

And just as the sale of alcohol began in fits and starts, with different states having different laws, the longterm growth was explosive and sustained growth, which we forecast for marijuana.

Indeed, Colorado, where recreational and medical marijuana was approved by voters, is a snapshot state of the powerful potential of pot as an economic game-changer. Gross sales from marijuana products in Colorado topped $1 billion in 2016, adding about 18,000 news jobs. And taxes derived from marijuana-product sales in that state now outpace tax revenue from selling alcohol.

We call it Reefer Money Madness, one of Top Trends for 2017.

As we forecast in December: “With growing popular support for marijuana legalization, we forecast a promising financial pot future. In particular, we forecast sharp growth in food- and beverage-infused marijuana products. These are becoming easier to produce at wider profit margins, are growing in popularity and are more easily branded and marketed, appealing to consumers put off by pot as a smoking product.”

But as President-elect Donald Trump’s administration is formed, the potential confirmation of Jeffrey Sessions as attorney general and other potential straight-laced appointments has some investors and analysts nervous.

After all, Sessions did famously say last April: “Good people don’t smoke marijuana” and that pot is “not the kind of thing that ought to be legalized.”

Those are among the comments that have some seeing a rough road ahead for marijuana. But the institute sees it differently – much differently.

While the Winter 2017 Trends Journal, coming next month, will provide a deep analysis of the coming end of pot’s long prohibition, our tracking of this trend finds:

  • Trump is a businessman forming an administration that will function more like a board room than a cabinet. And pot is good business, just like legalized gaming was for Trump in Atlantic City, Las Vegas and worldwide.
  • Trump will manage Sessions and others more like senior vice presidents, rather than political regulars. As long as the aim is economic  and job growth that increase tax revenues, pot is safe.
  • No longer considered a gateway drug, the social stigma and other societal resistances to marijuana have substantially weakened. And citizens, either by their votes or by pushing their state legislators, are proving they can make their own decisions about pot by letting the people decide. And Trump is a big supporter of states’ rights.
  • Finally, though Sessions is clearly no fan of pot use, he also reversed course on harsh sentences for crack cocaine and related drug offenses. And in doing so, he reflected a more tolerant stance than his reputation and how it is routinely portrayed in the mainstream media. 

With “reefer madness” fears at all-time lows, and “Reefer Money Madness” aspirations still growing, the perceived obstacles to pot’s future – largely political – represent temporary delays at best. As we forecast in December, states will write and implement the laws differently. Ultimately, however, people power and consensus will bring them to market.

TRENDPOST: Marijuana-legalization momentum will continue to build.   And as more states legalize pot, bordering states will be hard-pressed to stand still and watch the opportunity to generate healthy new revenue streams and tax income pass them by. Rhode Island, for example, just fast-tracked marijuana legalization to be considered in the Legislature, not via voters’ ballots. It sees the growth potential in other New England states, such as Massachusetts and Maine.

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