By Marijuana has always been a staple in the Narco-Economy since the 19th century. Today, it has begun its period of renaissance. Like a flower blooming in the wild, people are taking notice of the once shunned weed. Cannabis is something that people once thought could only be smoked is finding that it can be used for lotions and oils to help cure dermatological issues and medications for diseases such as Cancer and Parkinson’s.
There are companies that still seek the plant as a drug and they will use it as a tool for termination. which creates the tension between those seeking work and those who are looking for employees. It creates a stigma on the companies when they begin to encroach on the free time of their employees. The federal government is not responding to protect employees from establishing a work-life balance.
In November of 2014, the State of Colorado enacted the Colorado Amendment 64 (A64), legalizing the use of recreational marijuana. Dispensaries, during the first year of A64, generated a total sales of $700 Million (USD) between recreational and medical marijuana sales. During February of 2015, Colorado reported a 27% increase from projections of $60 million on tax revenue generated from marijuana sales. During 2014, the state made $44 Million from recreational sales and $32 Million from fees on the industry and pre-existing taxes on medical marijuana; totaling $76 million in collected tax revenue. Since then, the state of Colorado has seen $247 million in the collection of tax revenues from the cannabis industry.
The biggest downfall of the cannabis industry is banking. Given that cannabis is still considered illegal in the eyes of the U.S. Government, banks will not serve those in the industries. Meaning that dispensaries are a cash-heavy industry. This is keeping other industries from joining in on the potential growth that the cannabis industry is establishing. In addition, this is allowing dispensaries to avoid paying excess taxes by not claiming what they truly make in revenues. Allowing the cannabis industry to bank their monies in the United States would help increase employment and establish new sectors in the economy. Dealing a blow to the black market.
Constellation Brands (NYSE: STZ) recently decided to ignore the borders and reached to our neighbors in the North and invested in one of the leading cannabis companies in North America: Canopy Growth (TSE: Weed). Constellation Brands acquired a 9.9% stake for $245 Million CAD ($191 Million USD). Canopy Growth is a leader in the weed industry that supplies half of Canada’s medical-marijuana market. Giving Canopy Growth a unicorn valuation of $2 Billion dollars and a market cap of $1.93 Billion. This is the first legal investment of its kind putting a dent in the black market.
Recently, the government of New Zealand has said It’s looking to reform legislation on marijuana. They do not see it as a necessity to imprison those who use recreationally. They have decided to create a referendum within a three-year period to ensure that it is decriminalized. They are following in the steps of The Netherlands, Norway, Spain, Turkey, and now – Canada. This is going to be the start of the biggest topic to hit the World Economic Forum; being decriminalizing one of the founding products of the Narco-Economy – Marijuana.
In economics, the greater fool is the term given to a patsy. For the rest of us to profit, we need a bigger fool who will buy long and sell short. Most people try not to be the greater fool. The perfect fool is someone with self-delusion and an ego who thinks he can succeed where others have failed. People, like the founding fathers of the United States, that are greater fools have created the foundation to create a trillion dollar cannabis industry.
Gillybert 