Article by Tom Anderson, CNBC
While the legal status of cannabis companies may be in question, investors have more options to own a stake in these businesses.
Cannabis has strong growth prospects. Legal marijuana sales are projected to reach close to $22 billion by 2021 from nearly $7 billion last year, with a compound annual growth rate of 26 percent, according to Arcview Market Research, a San Francisco-based cannabis research firm.
In eight U.S. states, it is legal for adults to use marijuana recreationally and more than half of states have legalized it for medicinal purposes (see map below). GreenWave Advisors, another cannabis research firm, predicts that all 50 states could legalize weed within the next four years and the industry would be worth $30 billion.
The administration of President Donald Trump may diminish those optimistic outlooks. Attorney General Jeff Sessions has said he is “dubious” about the benefits of medical marijuana. In February, White House spokesman Sean Spicer said that he expects states to be subject to “greater enforcement” of federal drug laws and that Trump sees a ” big difference” between medical and recreational marijuana.
Supporters of the marijuana industry point to other comments that Sessions has made about keeping Obama-era enforcement rules, known as the Cole memo. That document, written by then-deputy attorney general James Cole, outlines how states and marijuana distributors can avoid running afoul of federal drug laws.
“The Cole memorandum set up some policies under President Obama’s Department of Justice about how cases should be selected in those states and what would be appropriate for federal prosecution, much of which I think is valid,” Sessions told reporters after a speech in Richmond, Virginia.