Frager Factor

Monday, September 17, 2018

The Case Against Legal Cannabis

Photo: Instagram/MedMen
As I have been the evangelist for Cannabis investing, I should bring you another side of the coin.

I have been promoting investing in Canadian Cannabis producers, where it is legal. I have also stressed that I see the value not in recreational use but in medical applications-- potential cures for terminal conditions that have eluded traditional science.

While Cannabis has been legalized in many states, and chains like MedMen are opening investments, opening Apple-like store, hiring "budtenders" and bringing local brick and mortar commerce back to life again, there is a downside. Marijuana is a federal crime. That restricts banking and interstate trade.

Today, American Flags (.com) Domain Investor Jeffrey Reynolds, whose day job is as an addiction expert, posted this study for consideration:

As New York considers its marijuana policy, it's important to look at what's happening in other states. There's a new brand report out in Colorado that offers some troubling findings: 

- Since recreational marijuana was legalized, marijuana related traffic deaths increased 151 percent while all Colorado traffic deaths increased 35 percent

- Colorado past month marijuana use shows a 45 percent increase when comparing the three-year average prior to recreational marijuana being legalized to the three years after legalization.

- The yearly rate of emergency department visits related to marijuana increased 52 percent after the legalization of recreational marijuana. (2012 compared to 2016).

- The yearly rate of marijuana-related hospitalizations increased 148 percent after the legalization of recreational marijuana. (2012 compared to 2016)

- RMHIDTA Colorado Task Forces (10) conducted 144 investigations of illicit market marijuana in Colorado resulting in 239 felony arrests and 7.3 tons of marijuana seized.

- Violent crime increased 18.6 percent and property crime increased 8.3 percent in Colorado since 2013

- Marijuana tax revenues represent approximately nine tenths of one percent of Colorado’s FY 2017 budget.

There's lots to these numbers that isn't captured in bullet points, but it's important that we continue to use data (not politics) to make important policy decisions that can potentially impact public health and safety. Here's a link to the full report:

A commenter on Jeff's thread offered this rebuttal:

A Review of the Rocky Mountain High Intensity Drug Trafficking Area 2017 Report


Photo: Forbes

Following the governments position on lifting the Federal Statues against marijuana will give you a flip flop headache:

In January 2018

Attorney General Jeff Sessions has launched a new war on marijuana legalization.

"On Thursday, Sessions rescinded guidances from former President Barack Obama’s administration that allowed states to legalize marijuana with minimal federal interference. In a statement, Sessions said that the move will allow federal prosecutors “to use previously established prosecutorial principles that provide them all the necessary tools to disrupt criminal organizations, tackle the growing drug crisis, and thwart violent crime across our country.”

In effect, this will let federal prosecutors use their own discretion to crack down on marijuana businesses in states where pot is legal for recreational purposes.

The move is a big deal for legalization efforts. While marijuana has been legalized for recreational purposes in eight states and Washington, DC, it remains illegal at the federal level — classified as a schedule 1 drug (the strictest such category in the scheduling system) with criminal penalties attached.

The Obama administration took a soft approach to the drug, essentially letting states legalize as long as they met certain criteria. But Sessions, who now heads the US Department of Justice, has pulled back the memos at the core of past lax enforcement."

Then in July 2018 Forbes writes:

Why President Trump Is Positioned To Be Marijuana's Great Savior 

"And now we have a president—one known for his unpredictability—who recently signaled a willingness to support reform. President Trump, whether premeditated or not, is putting himself in a position to make history by becoming the U.S. president who reversed a nearly century-long policy of marijuana prohibition and, in so doing, reap the political spoils of taking on the mantle of “the legalization president.”

Now in September 2018

Why the Trump Administration's Plot to Derail Marijuana Momentum Will Flop Bigly
Marijuana stock investors shouldn't worry about the federal government's secret plans to whack weed before it grows too much support.


"On Wednesday, online news site BuzzFeed reported that the Trump Administration is engaged in a "secret war on weed." BuzzFeed stated that the Marijuana Policy Coordination Committee told multiple federal agencies to submit "data demonstrating the most significant negative trends" about marijuana use. The goal appears to be to try to prevent further support for relaxing federal anti-marijuana laws.

If the committee is successful in its efforts, companies with U.S. marijuana operations such as Scotts Miracle-Gro (NYSE:SMG), CannaRoyalty (NASDAQOTH:CNNRF), and Kush Bottles (NASDAQOTH:KSHB) could see their hopes of operating in a fully legal environment dashed.

The effort to cast marijuana in a negative light isn't coming from Trump. Instead, it's being coordinated by the Office of National Drug Control Policy (ONDCP). Jim Carroll is the head of the ONDCP, a position also known as the "drug czar." Carroll isn't a close confidante of Trump."

It's important to get all the facts, and research all angles before making responsible investment decisions.

Meanwhile the two stocks I support are up today, With Canopy (CGC) up 2.45% for the day and 692% since I acquired my initial shares for $6 on 5/9/17.

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About The Author: Owen Frager is an Internet marketing expert ready to help take your company to the next level.

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