Why Legalization Isn’t the End of the Story

Most of you’ve known me long enough to know I love this country, but sometimes I wonder about this government. In my experience, it could screw up a one-car funeral.

Some of the laws it has put on the books are so ridiculous. I know some of you will think I’m making this up, but I swear it’s all true.

Did you know it’s a federal crime to attempt to change the weather without telling the secretary of commerce?

Or to say something so annoying to someone that it makes them hit you in a national forest? That’s also a crime.

It’s also a federal crime to sell wine with branding that includes the word “zombie.”

It’s a federal crime to willfully make unreasonable noise at the Pentagon…

And also to take home milk from a quarantined giraffe. I swear to you, that’s true.

You can’t skateboard at the National Institutes of Health, and you also can’t use a machine gun to hunt doves and pigeons.

The list goes on and on, and I haven’t even touched on taxes.

But even higher levels of stupid government efforts have been reached when you look at state laws concerning marijuana.

Laws on Marijuana Raise Questions

You can smoke pot in California, and you can buy it… But did you know California doesn’t allow the use of planes, boats, trains, human-powered vehicles or unmanned vehicles like drones to transport marijuana-related products?

I guess the only way you can get it home is by car. From a driving-while-impaired perspective, that doesn’t make much sense.

The state of Connecticut doesn’t allow dispensaries to have lit signs.

Delaware allows you to advertise pot only in the phone book. I didn’t know they printed phone books anymore.

Nevada allows gambling and prostitution too in some areas. It’s always been the “sin state.” And you can have a sign at a marijuana dispensary, but you’re allowed to use only two fonts on the sign.

But the big winner is Washington, D.C. Why am I not surprised? Recreational marijuana is legal, but you can’t buy or sell it.

I’m not joking. You can give it away, but you can’t sell it.

So enterprising potheads sell related items and give the marijuana as a free gift.

California is the largest potential market in the U.S. for medical and recreational marijuana, but Sacramento seems to be doing all it can to keep a lid on sales.

And the state capital’s efforts are working. Projected revenues from pot sales at the start of 2019 were $514 million. Those have been downgraded to just $360 million for the 2019 to 2020 budget year.

The high taxes and the cost of complying with the crazy number of regulations in the Golden State cost consumers 77% more for pot from a legal vendor than from their friendly neighborhood illegal pot entrepreneur.

No wonder revenue estimates are way off.

Canada, which legalized recreational pot nationwide, is having similar problems. Only 27% of all pot sales in the first quarter of 2019 were made through licensed channels.

Maybe we should be investing in the street dealers…

The sales tax on pot in Washington state is 37%. State excise taxes are as high as 15% and 17%.

Come on, folks! The worldwide pot market has been estimated to be as high as $66 billion by 2025. But if the government doesn’t get out of the way, the bulk of that money will be made by street vendors and the potential tax dollars will be out the window.

Is there a local illegal pot dealer exchange-traded fund yet?

Good investing,

Steve