Best of the Week
Most Popular
1. Crude Oil and Water: How Climate Change is Threatening our Two Most Precious Commodities - Richard_Mills
2.The Potential $54 Trillion Cost Of The Fed's Planned Interest Rate Increases - Dan_Amerman
3.Best Cash ISA Savings for Rising UK Interest Rates and High Inflation - March 2018 - Nadeem_Walayat
4.Fed Interest Hikes, US Dollar, and Gold - Zeal_LLC
5.What Happens Next after February’s Stock Market Selloff - Troy_Bombardia
6.The 'Beast from the East' UK Extreme Snow Weather - Sheffield Day 2 - N_Walayat
7.Currencies Will Be ‘Flushed Down the Toilet’ Triggering a ‘Mad Rush into Gold’ - MoneyMetals
8.Significant Decline In Stocks On The Cards! -Enda_Glynn
9.Land Rover Discovery Sport Extreme Driving "Beast from the East" Snow Weather Test - N_Walayat
10.SILVER Large Specualtors Net Short Position 15 Year Anniversary - Clive_Maund
Last 7 days
Bitcoin Price Trend Forecast, Paypal FUD Fake Cryptocurrency Warning - 17th Mar 18
Strong Earnings Growth is Bullish for Stocks - 17th Mar 18
The War on the Post Office - 17th Mar 18
GDX Gold Mining Stocks Fundamentals - 16th Mar 18
Nationalism, Not the Russians, got Trump Elected - 16th Mar 18
Has Bitcoin Bought It? - 16th Mar 18
Crude Oil Price – Who Wants the Triangle? - 16th Mar 18
PayPal Cease Trading Crypto Currency Bitcoin Warning Email Sophisticated Fake Scam? - 16th Mar 18
EUR/USD – Something Old, Something New and… Something Blue - 16th Mar 18
DasCoin: A 5-Minute Guide to How It Works - 15th Mar 18
Stock Market Downward Pressure Mounting - 15th Mar 18
The Stock Market Trend is Your Friend ’til the Very End - 15th Mar 18
6 Easy Ways to Get What Women Want, for Less! - 15th Mar 18
This Isn’t Your Grandfather’s (1960s) Inflation Scare - 15th Mar 18
Eye Opening Stock Market Index, Volatility, Charts and Predictions - 15th Mar 18
Gold Cup At Cheltenham – Gold Is For Winners, Not For Gamblers - 15th Mar 18
Upcoming Turnaround in Gold - 14th Mar 18
Will the Stock Market Make Another Correction this Year? - 14th Mar 18
4 Ways To Writing An Interesting Education Research Paper - 14th Mar 18
China Toward Sustainable Economic Growth - 14th Mar 18
Stock Market Direction Is No Longer Important - 14th Mar 18
Trade Tariffs Defeat Globalists and Return Prosperity - 14th Mar 18
Stock Market Crash is Underway and Cannot be Stopped! - 14th Mar 18
Are Energy Sector Stocks Bottoming? - 14th Mar 18
Nasdaq Stocks Soars to New Record High After Strong Job Reports - 14th Mar 18
Bitcoin BTCUSD Elliott Wave View Calling for Rally toward $15,000 - 13th Mar 18
Hungary’s Gold Repatriation Adds To Growing Protest Against US Dollar Hegemony - 13th Mar 18
Record Low Volatility in Precious Metals and What it Means - 13th Mar 18
Tips for Writing and Assembling the Classification Essay - 13th Mar 18
Gerald Celente "If Rates go up too High, the Economy goes Down, End of Story" - 13th Mar 18
Stock Market Selloff Showed Gold Can Reduce Portfolio Risk  - 13th Mar 18
Silver Does it Again! Severe Consequences - 12th Mar 18
Has the Stock Market Rally Run Out of Steam? - 12th Mar 18
S&P 500 at 2,800 Again, Stock Market Breakout or Fakeout? - 12th Mar 18
The No.1 Energy Stock To Buy Right Now - 12th Mar 18
What Happens Next When Stock Market Investor Sentiment is Neutral - 12th Mar 18
Economic Pressures To Driving Gold and Silver Prices Higher Long-Term - 12th Mar 18
Labour Sheffield City Councils Secret Plan to Fell 50% of Street Trees Exposed! - 12th Mar 18
Stock Market Uptrend Resuming? - 11th Mar 18
Bond Market Interest Rate Yields Are Rising Again… Stocks Are on Thin Ice - 11th Mar 18
Death of Europe's Greenest City, Police State Sheffield Labour Council to Fell 50% of Street Trees - 11th Mar 18
Do All Bull Stocks Markets Need to Have a Bearish Divergence? - 11th Mar 18
An Inflation Indicator to Watch, Part 3 - 11th Mar 18
Online Stock Trading Tips - Tips about Online Trading & Day Trading - 11th Mar 18
NDX makes a new high. What does that mean? - 10th Mar 18
Blue Chip Companies on Track for $800 billion Buyback Record in 2018 - 10th Mar 18
Cheap Gold Stocks Basing - 10th Mar 18
An Introduction to Online Forex Trading - 10th Mar 18

Market Oracle FREE Newsletter

Urgent Stock Market Message

Is Pot Replacing Alcohol? It’s a Money Making Business

Commodities / Cannabis Aug 08, 2017 - 01:52 PM GMT

By: Rodney_Johnson

Commodities Pot is what alcohol used to be.

It’s an industry ready to take off, but one that’s still finding its way, and one whose progress is not exactly encouraged by the federal government. It’s a little bit like Prohibition 2.0.

The alcohol industry – now eight decades after states ratified the 21st amendment and ended prohibition – generated $475 billion in economic activity and $110 billion in wages in 2014.

Across the United States, more than 4.5 million people work in alcohol-related jobs. Alcohol production, distribution, sales, and service is one of the biggest industries in the country.

We’re a long way from the 13-year saga of prohibition. But it didn’t end overnight.

In March 1933, President Roosevelt signed into law the Cullen-Harrison Act, which legalized the sale of “near beer,” containing 3.2% alcohol or less, as well as similar alcohol-lite wine.

The ratification of the 21st amendment repealed the 18th amendment and, at the end of 1933, ended the U.S.’s decade-plus run of alcohol abstinence.

Sort of.

Prohibition resulted from many years of groups fighting for temperance to curb alcoholism, family violence, political corruption (related to saloons, taxes, licensing, and revenue), and a general debasement of society.

In one big way, it worked.

By 1933, the percentage of American adults that consumed alcohol had been cut in half. But there were side effects.

With alcohol illegal, production, distribution, and sales went underground. With modern communications (telephones) and delivery (cars and trucks), organized crime took over the trade and flourished.

In 1925, five years after prohibition started, roughly 50,000 speakeasy clubs operated in New York City alone. With all of that commerce off the books, cities and states lost tremendous revenue.

As the Great Depression took hold, people from all corners started calling for the end of prohibition…

Consumption was lower than before, but not eradicated. And the trade created criminals. By making alcohol legal again, tax revenue would flow back to governments and crime would drop.

Sound familiar?

Passing the 21st amendment didn’t make alcohol legal nationwide. States and local governments could still restrict the industry as they saw fit. The last state to end prohibition was Mississippi… in 1966.

Today, there are still “wet” and “dry” towns across the country, and locations considered “moist,” that have some restrictions on alcohol sales and consumption, like days it can be sold or requiring memberships in private clubs.

Welcome to the crazy patchwork of regulations and licenses – and slow rollout – that await the marijuana industry.

The Marijuana Revolution

Eight states have legalized recreational marijuana, about 20 approve its use for medicinal purposes, and the rest have either no approval or very strict terms.

Unlike with prohibition, today the federal government is the laggard.

The Obama administration chose not to prosecute marijuana related crimes that were deemed legal in states.

The Trump administration has signaled it will take a harder line, although it has yet to cross swords with states like Colorado by prosecuting someone there for possession or a retail outlet for distribution.

Given that 57% of the country wants the federal government to decriminalize marijuana and only 37% want to keep it illegal, chances are that we’ll see marijuana follow alcohol in the years ahead.

And just as alcohol added $258 million, or 9% of all federal revenue, to the coffers in 1934, Colorado has now taken in just over $500 million in tax and fee revenue since legalizing recreational pot in 2014. And that’s just one state!

The big changes will mean big opportunities.

Legal marijuana already employs more than 150,000 people, and the industry is expected to generate more than 250,000 new jobs in the next three years.

As I noted in a Boom & Bust article this spring, more people work in the marijuana industry than in all U.S. car dealerships.

And while we might think of the pot industry as a bunch of people saying “Dude!” and eating Doritos, it’s more about horticulture, harvest, storage, efficient distribution, and retail locations.

In short, it’s business. With business, especially one that’s growing at such a rapid pace, comes opportunity.

Today the field is clouded by the U.S. government, which keeps out any company or industry that has interstate interests or needs a federal license by threatening prosecution.

This allows small startups to establish themselves.

There are many tiny companies focused on marijuana, and even a marijuana stock index. But the nature of small stocks is explosive growth and outsized risk. It takes a fair amount of research to know who is real and who is likely to go up in smoke (pun intended).

That’s why we’ve invited noted marijuana industry expert Brendan Kennedy to our Irrational Economic Summit in October to give us the inside scoop. He is the CEO of Privateer Holdings, the world’s first private equity firm investing exclusively in legalized cannabis.

With the industry in its infancy, this should be a fabulous time to get in before it goes mainstream.

For a closer look at the every growing marijuana industry, and the potential investment opportunities it may present, check out our latest infographic: Is the Grass Getting Greener?


Follow me on Twitter ;@RJHSDent

By Rodney Johnson, Senior Editor of Economy & Markets

Copyright © 2017 Rodney Johnson - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Rodney Johnson Archive

© 2005-2018 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules