The History of US Cannabis Consumption
Although exact dates are unknown, it is now acknowledged that recreational cannabis became part of mainstream US culture in the 1930s, during the post-prohibition drug wars between the various criminal gangs who were looking to diversify their income away from bootleg alcohol.
During this time the drug gained notoriety for the intense feelings of pleasure it provided, with little of the side effects associated with alcohol consumption. It’s unknown exactly how long cannabis has been used in the US for recreational uses, but many researchers say it has been part of American culture for hundreds of years after hemp plantations became profitable in the 17th century. But whatever the history of the narcotic, it is widely known that the future of cannabis is starting to look very positive indeed.
One by one, states across the US are beginning to legalise the recreational use of cannabis. Colorado, Oregon, Washington, Alaska, Nevada, Massachusetts, and Maine, all of these states have voted to legalise the use of this notorious drug. It’s widely expected that California will be next.
If one lesson can be learned from the end of prohibition in 1933, it’s that the public will quickly enter a frenzy of consumption when offered something that was once forbidden.
The Positives and Negatives
Now, this is where it gets interesting for investors. As soon as the de-criminalization of cannabis use is complete, the commercial possibilities will explode. Many people will become very rich very quickly through the manufacture and resale of cannabis, and those who are able to get in early will be able to ride the train to great wealth.
However, perhaps the question many investors should be asking is not “how can I?”, but “should I?”.
It should be noted that there are several benefits of using marijuana to treat many medical conditions, all of which have been researched and proven to be beneficial in clinical trials. These include treating and preventing the eye disease glaucoma, increasing lung capacity in cancer sufferers and helping to control epileptic seizures.
But the use of marijuana in this form is from government authorised and grown medical-grade seeds, quite different to the illegal drug that is sold on the black market. It is here where the use of cannabis as a leisure activity has exploded in recent years, and it is here where most of the negative effects of the drug can be seen. These effects include:
- Short-term memory problems
- Severe anxiety, including fear paranoia
- Psychosis – seeing, hearing or smelling things that aren’t there, and not being able to tell imagination from reality
- Loss of sense of personal identity
- Lowered reaction time
- Increased heart rate
With this in mind, it would be up to each individual investor to decide if making money from cannabis is both ethically and morally in line with their own personal values.
Whilst the effects of cannabis consumption can be compared to alcohol consumption, it is well-documented that alcohol has a more destructive effect on the human body. For example, it is widely known that smoking cannabis leads to feelings of relaxation and calmness, unlike the agitation and violence that is often caused by alcohol misuse. And the effects of liver damage from alcohol addiction is becoming a global epidemic, whereas cannabis use has a much lower rate of hospitalisations.
In the UK, hospital admissions for cannabis number less than 1000 per year whereas alcohol now accounts for a thousand times as many. At first glance, it would appear that cannabis as an investment would be more ethical than investing in a large-scale distillery or brewery. However, it has to be considered at what point as an investor do you draw the line?
If investing in this class B drug is permitted, will it eventually lead to other class B drugs becoming decriminalised in the future? Remember that class B drugs include amphetamines such as speed, which has been known to kill when taken in conjunction with alcohol.
Cannabis Investing Opportunities
Once cannabis is legal on a federal level across the US it could be consumed just like alcohol, and will inevitably become a dominating force in leisure activities, just like alcohol has become.
There will likely be a boom from the sale of cannabis in the same way that Dutch smoking coffee houses have become popular in Amsterdam. These coffee shops do not serve alcohol, but allow anyone of a legal age to purchase a wide variety of cannabis blends either rolled as a joint or eaten in a cake, along with a cup of coffee and the morning paper. When we consider the explosion of coffee shops over the last 20 years, it’s not too difficult to see specialist coffee houses offering a joint along with your creamy double latte.
The possibilities are enormous and some of the figures associated with the taxation of the crop are intriguing to say the least. For example, in the US, per square kilometre of land, wheat crops earn the US government $56,000 in taxes. Now compare that to the projected tax from cannabis crops – $47 million! I believe this isn’t a question of if the drug will become fully legal for leisure use, but when.
And when the time comes, you’ll have to ask yourself if you feel comfortable to be part of the cannabis investing movement, or if you’d rather sit and watch from the side-lines instead.