CBS Money Watch – Is cannabis too lucrative to be illegal?

CBS Money Watch – Is cannabis too lucrative to be illegal?

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Dave owns a retail business in the foothills of the Sierra Nevada mountains in California. He was selling everything from flat-screen TVs to furniture — until Amazon (AMZN) crushed his brick-and-mortar warehouse store with its online merchandise, forcing him to put it up for sale.

His realtor — a conservative pillar of the local church — reluctantly told Dave the only potential buyer was someone who would turn the building into an indoor marijuana farm.

Dave hopes his realtor can seal such a deal, particularly since Californians voted in 2016 to legalize “full recreational use” of marijuana. The realtor “may be anti-drug, but he’s pro-money,” said Dave.

That’s the direction the whole country is heading. The laws against marijuana can’t fight the free market, including the $100 billion in annual potential profits and the $28 billion states could reap in tax revenue. Most important, the many forms that marijuana can morph into make it a product that’s portable, even potable and able to escape detection if transported across state lines.

“When people think of cannabis, they think of the growing and selling of plants,” said Danny Davis, a managing partner at Convectium, a business services company that specializes in funding and supporting the marijuana industry. “But companies are making major investments in extraction equipment to provide oils, tinctures and waxes.”

Nevada becomes fifth state to legalize recreational marijuana

Just like liquor, which can be distilled into stronger forms, so can marijuana, which can also be distilled into smaller forms. Pot that you buy can be hidden in a perfume bottle, in a “topical cream” used at the beach or in the spice cabinet of your kitchen, and no one will be the wiser. You can even get cannabis “oil pens” and “battery kits.”

A potent extract of cannabis can easily be put into a vaporizer and inhaled, and that concoction could be three times as strong as a marijuana cigarette, which itself is much stronger now than it was in the 1960s when pot began entering mainstream American culture.