Already generating billions of dollars every year in the U.S., the incipient legal marijuana industry is a force Attorney General Jeff Sessions is yet to reckon with.
Famous for uttering statements like, “good people don’t smoke marijuana,” and, “we need grown-ups in charge in Washington to say marijuana is… in fact a very real danger,” Sessions has been on a crusade to stop cannabis legalization across America.
But with cannabis companies beginning to conduct their first IPOs and raising hundreds of millions of dollars in venture capital to expand their markets and amp up their facilities, one man alone is unlikely to put a dent on the burgeoning industry, even if he happens to be the U.S. Attorney General.
On the day that Canada-based Tilray first offered its medical cannabis company shares at $17, they hit $22.39 by market closing. Since then, investments in medical marijuana all over the country have soared, recently attracting reputable business gurus, like the confectionary millionaire William Wrigley Jr. Meanwhile, CB Insights reports that legal marijuana investments topped $593 million in 2017, a spectacular jump from the $121 million in funding observed in 2014, and double the investments recorded for 2016. From what we have seen so far, 2018 statistics will reveal a continued trend upwards.
As Sessions lobbies in DC and speaks publicly about stopping the spread of legalization to more U.S. states, industry insiders maintain that this is the best time to purchase cannabis stocks.
The head of a network of financial institutions servicing the cannabis industry, Nathaniel Gurien believes the government will crack down on cannabis licensees who are not fully compliant. He advises companies and investors to enhance their “compliance, transparency, and accounting,” in order to reduce the risk of “becoming the target of law enforcement.”
For Silk Road’s David Kram, “despite the negative headlines from Sessions, the cannabis industry is here to stay and is relatively risk-free at this juncture.” Kram’s company develops cannabis products with the goal of ending the opioid crisis. “Imagine investing in Anheuser-Busch when it was just a small local business in St Louis… this is the type of highly attractive opportunity that exists right now in the cannabis industry for investors," the socially responsible entrepreneur has commented.
One of the industry’s greatest vulnerabilities lies perhaps in the discrepancy between state and federal laws. It is on that very spot that Sessions is trying to hit it. For cannabis manufacturing consultant Erik (CanCore), "Attorney General Sessions has been very clear that until Congress changes the laws regarding cannabis in the Controlled Substance Act (CSA), he is going to continue to follow the law as it is written... Congress needs to fix this issue as soon as possible."
However, it is unlikely that Sessions or the Trump administration as a whole will succeed in causing any major setbacks for the industry. Investors know there are billions of dollars to be made, and funding will continue to pour into cannabis-related startups, regardless of how many outraged statements Sessions might deliver to the press.
David Kani is a California based trial lawyer, author, and social commentator. Connect with David at [hidden email] or to book David to speak at your event, please contact [hidden email]