BUZ INVESTORS Marijuana Stocks Growth While it’s unnerving to see marijuana in Donald Trump’s crosshairs, investors should understand that healthcare, trade, and the budget are higher on the president’s policy agenda. “Trump vs Marijuana” is a lower-priority fight, at least from the administration’s perspective.
The upward trend (which has delivered 500%+ returns to investors) is expected to continue for marijuana stocks in 2017. We’ve come to this conclusion after months of research and analysis.
Nothing we’ve reviewed suggests that marijuana legalization is in any danger. In fact, the underlying trends are on track with earlier predictions. So don’t buy into the conventional wisdom. It is tainted by bias—a bias towards conservative forecasting.
A lot of pot stocks took a beating when Donald Trump nominated Senator Jeff Sessions as his first attorney general. Sessions is notoriously hostile to marijuana legalization. When he was still representing Alabama in the upper chamber of Congress, Sessions said, “Good people don’t smoke marijuana. There is more violence around marijuana than one would think.” (Source: “Senators held a hearing to remind you that ‘good people don’t smoke marijuana’ (yes, really),” The Washington Post, April 5, 2016.)
Another person who seems to be contradicting his boss is Sean Spicer, the embattled White House press secretary. Sometime in late February, Spicer said that states should expect “greater enforcement” from the federal government. However, he restricted his comments to recreational marijuana, saying there was a “big difference” between medicinal and recreational use. (Source: “Spicer: Feds could step up enforcement against marijuana use in states,” The Washington Post, February 23, 2017.)
So far, only eight jurisdictions have made the full jump to legal weed: Oregon, Colorado, Washington, California, Nevada, Massachusetts, Maine, and the District of Columbia.
Donald Trump could theoretically pressure other states away from marijuana legalization, but that argument has a lot of shaky assumptions.
Analysts are so concerned with worst-case scenarios that they underweigh best-case scenarios. This is a bad way to value the risk/reward trade-offs of pot stocks, particularly because they are in an accelerated growth cycle. Returns of 400% or 500% are pretty common in this industry.
Is it likely? No. But is it possible? Yes.
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