Up in Smoke: How Marijuana Will Change Our Economy
It was the summer of 1965, and I was recuperating from a broken arm in the home where I grew up in West Virginia. I couldn’t swim or play baseball with my friends since I had a cast on my arm, and I was bored silly. Looking for something to read, I leafed through an old medical textbook that my father, a physician, owned. It had been published around 1915.
To my amazement, the textbook contained an entire chapter on cannabis, the scientific name for the plant also known as marijuana. It detailed all sorts of emulsions and concentrates that could be used to treat various maladies. But those treatments had long been criminalized, thanks to the Marijuana Tax Act and subsequent legislation.
A decade later, I was asleep in my dorm room at college when I heard my roommate, who I’ll call Jim, throwing up after drinking too much the night before. After a few minutes, his vomiting progressed to dry heaves, an attempt to vomit without actually doing so.
The noise (and the smell) woke me up, and I got Jim a glass of water to settle his stomach. But he vomited the water back up immediately.
Our friend Dale walked into our room. He lit up a hand-rolled cigarette that had the unmistakable odor of cannabis. “Smoke this,” he told Jim.
After just one “hit,” Jim was able to drink an entire glass of water without throwing up. And an hour later, he was eating lunch in the dining hall.
Once I saw for myself how cannabis could curb nausea and vomiting, I remembered reading about its many therapeutic uses in my father’s old textbook. So I wasn’t surprised to learn a few years later that cancer patients were using it to help control the nausea and vomiting that often accompanies chemotherapy.
But possessing cannabis was then, and still is, a federal crime. The Controlled Substances Act classifies marijuana as a Schedule 1 drug – one with high abuse potential, severe safety concerns, and no legitimate medical use.
Based on my personal experience, I knew cannabis did have legitimate medical uses. And my convictions were strengthened when my colleague, fellow libertarian author Peter McWilliams, was diagnosed with non-Hodgkin's lymphoma in the 1990s. Peter was able to control the pain and vomiting associated with his condition with cannabis but was arrested for cultivating the drug in 1997. He was released on bail only on the condition that he not use marijuana.
Three years later, vomiting and in great pain, Peter died. Since then, I’ve considered Peter and other cancer patients who were denied permission to use cannabis as having been tortured by the US government.
But things are beginning to change. Most states now permit individuals with cancer and other debilitating diseases the right to purchase cannabis. And researchers have rediscovered that cannabis has countless medical uses.
For instance, cannabis can slow the spread of some cancer cells. It can also ease the debilitating effects of neurological conditions like epilepsy and multiple sclerosis, and it can reduce pain. Ongoing research has also shown promise for cannabis to treat Alzheimer’s, Crohn’s disease, and dermatological conditions like eczema and psoriasis.
Ironically, cannabis, a substance that federal law considers to have no legitimate medical use, is now being used to help individuals addicted to prescription opioids and heroin. In 2017, nearly 50,000 Americans died from opioid overdoses. Cannabis has also shown promise in the treatment of post-traumatic stress syndrome (PTSD).
If Congress reclassifies cannabis so that it can once again be legally prescribed by medical practitioners or used for recreationally, it will have an enormously positive economic impact in the US. For proof, look to Colorado, which legalized cannabis in 2012. A study published in March showed that a taxed and regulated cannabis industry contributed more than $58 million to the local economy of Pueblo County, one of 64 counties in Colorado.
That’s not a fluke. Legalizing cannabis would add more than $100 billion to America’s GDP by 2025, according to a study from the cannabis analytics firm New Frontier. It could also create up to one million new jobs.
Ironically, the biggest obstacle to legalization is the unsupported belief that cannabis is a gateway to more dangerous drugs like cocaine and heroin. The truth is that many of the most promising cannabis-related therapies are derived from non-intoxicating forms of the drug. And while other forms of cannabis are mildly intoxicating, there has never been a documented death from an overdose.
It’s just a matter of time before the federal law that makes cannabis illegal is repealed. But be careful if you plan to cash in on this bonanza. The hype surrounding the prospect for legalization reminds me of the type of corrupt behavior that went on during the dot-com bubble. The relentless pump of stocks as dodgy investors promoted the hell out of the “next Google” was followed by the inevitable dump when investors realized the company was little more than a kid in his mom’s basement.
It will be interesting to see what happens in Canada in the coming months. Our northern neighbors are legalizing marijuana for recreational use, effective October 17, 2018. The changes in the Canadian economy may reveal something about how legalization of marijuana could impact the US.
Before you invest in anything cannabis related, conduct extreme due diligence. Learn everything you can about the industry, the state laws, and federal restrictions. And to ensure you’ve covered all the bases, have your lawyer review the paperwork before you make any financial commitment.
For now, investing in cannabis remains an aggressive and highly speculative strategy. There’s scope for a long-term payoff, but don’t expect an easy journey.
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