House legislators unveiled a bill today that would end the federal prohibition of marijuana. Currently, 15 states have legalized medicinal marijuana, but Federal enforcement has historically interfered with the operations of doctor’s offices and dispensaries devoted to the herb. In November of last year, California voted on Proposition 19, a bill that would legalize recreational marijuana in the state. The bill received considerable public support, both from those many might expect, and the business-minded types who saw considerable fiscal opportunities in its legalization. Among its advocates, multi-billionaire investor George Soros and former Facebook President Sean Parker spoke out in support of its legalization, on the basis it could help balance the state’s budget, create much needed jobs and offer investment opportunities.
Already in California, where medicinal cannabis is legal and perhaps most accepted, a number of investment opportunities have emerged with much success. Medical marijuana, before widespread legalization, is estimated to be a $45 billion market, and there have been several IPO’s that have already emerged to begin reconstructing and corporatizing the age-old business to modernize with the changing attitudes.
For instance, General Cannabis, Inc. (CANA), a web-based company operating within the ancillary markets of the industry, has seen continued revenue growth and a high level of interest in its various endeavors from investors and the general public alike.
Attitudes are changing, a fact proved by today’s bill and the success of burgeoning medical marijuana endeavors. There is an extreme budget deficit, one that Americans don’t want to pay for in tax dollars or cuts in federal programs or schools. Taxing marijuana would help create some of that much needed cash, a fact that will at least interest the liberal minded among legislators.
Designed to reduce the federal government’s part in enforcing marijuana laws, a pricy endeavor within itself, the bill would “end federal marijuana prohibition” and allow states to legalize, regulate and tax marijuana, says a press release from advocacy groups confirmed by the office of Democratic Rep. Barney Frank on Wednesday. Mr. Frank, alongside Texas Republican Rep. Ron Paul and others, made the introduced the bill today.
In spite of the endless years of tee-shirts worn by Bob Marley fans stating “legalize it,” this is the first bill of its kind to be federally considered and it seems like the timing could be right. Granted, there are those who fear the legalization of marijuana will inspire more people to use or abuse it but a large section of the American population believes the war on cannabis is swallowing unnecessary tax dollars that America can no longer spare.
Among the reasons some cited for the failure of Proposition 19, was the rhetoric within the bill. Some supporters of medical marijuana felt that the bill was not written in a way that made the rules entirely clear or lacked a true understanding of the way a piece of legislation should read. This latest bill is being stressed not as a “legalization bill,” according to Mr. Frank’s office but rather would, “limit the federal government’s role in marijuana enforcement to cross-border or inter-state smuggling, allowing people to legally grow, use or sell marijuana in states where it is legal,” according to the release.
The potential release of the bill could be an economic boon not only for the government, but also the burgeoning businesses within the field. Chatter surrounding the “Green Rush,” in the months prior to Prop 19, or the potential to make money in this new multi-billion dollar terrain will surely return following the release of this language.
Even with the current restrictions, some companies have managed to be highly successful in defragmenting and professionalizing the once basement industry, blazing the trail for medical marijuana companies in the public sector.
General Cannabis, with their technology-based Internet marketing services and multiple subsidiaries, including WeedMaps.com, reported their financial results for the first quarter ending March 31, 2011 with total revenue for the quarter of $2.7 million, an increase of 55 percent over revenue of $1.7 million in the first quarter of 2010 and indicative of the manner both the company and the industry are expanding.
This example of a relatively new, multi-million dollar company operating on the new frontier, hints at the tremendous profit potential in cannabis. For liberal minded legislators, their revenue, generated largely through their Internet subsidiaries, should glitter with potential. Many expert investors, Soros and Parker included, trained to identify the next major money makers, have pointed at marijuana as a huge pool of prospective profit, it’s now up to the government to decide to act on it.