Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



The 7 States Slamming the Door on Legalized Marijuana

Source: Flickr / Brett Levin.

Colorado's newly legal recreational marijuana industry is creating quite a buzz – particularly when it comes to visions of a new tax revenue stream for cash-strapped states. With the Centennial State's successful rollout, it seemed certain that others, in addition to Washington state, would follow.

But, there are major headwinds that may keep the budding industry from spreading across the nation – one of which is that state governors are coming out against recreational pot, despite its revenue-producing potential.

Too risky?
Shortly after Colorado's new law took effect on January 1, governors of other states began weighing in on the subject. Maryland Governor Martin O'Malley stated in a radio interview several weeks ago that he is "not much in favor of" legalizing pot for recreational use, citing concerns about drug abuse.

Similarly, New Hampshire Governor Maggie Hassan has said she would veto any bill making marijuana legal for that purpose, although she approved a bill making medical use legal last year. Also speaking out in early January was Alabama's Gov. Robert Bentley, who is against making pot legal for any purpose – even medicinal.

Just last weekend, as the National Governors Association met in Washington, D.C., the governors of Texas, Connecticut, Indiana, and Missouri all stated on CNN's State of the Union broadcast that they have no interest in legalizing pot for adult use, either.

Even Colorado's Gov. John Hickenlooper, when queried by several of his peers at the NGA, counseled against legalization, telling them to "...wait a couple of years."

Financial headaches remain, as well
For a burgeoning business that promises to bring Colorado at least $51 million in extra tax revenue by the end of June, it certainly seems to be gaining in unpopularity. The industry's inability to convince banks to allow pot-related business deposits and accounts doesn't seem to be abating, either.

Just recently, the federal government attempted to break down the financial barricades by issuing guidelines designed to make banks feel more at ease with the legal cannabis trade, though the overture seems to have fallen flat. Even before Colorado's new marijuana law took effect, Bank of America Corp. (NYSE: BAC  ) , which has for several years been Washington state's official banker, noted that it would not balk at handling money generated from the state's soon-to-be-legal adult use marijuana industry. So far, other banks haven't been quite so forthcoming.

Source: Flickr / Sean MacEntee.

Likewise, after prohibiting the use of their cards for transactions involving medical marijuana in parts of California last fall, both Visa (NYSE: V  ) and MasterCard Inc. (NYSE: MA  ) now seem to have softened their stance, allowing partner banks to decide on whether or not they want to handle the transactions. While this may work swimmingly with cards issued by Bank of America, this policy could become problematic if other banks judge these transactions to be too risky.

It's clear that the legalization of recreational use marijuana will not spread like wildfire, but chances are good that attitudes will mellow with time. Meanwhile, states like Colorado and Washington will profit, as will B of A, Visa, and MasterCard – a situation that likely won't go unnoticed by current skeptics.

Great returns without any of the headache
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

Read/Post Comments (4) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 02, 2014, at 12:23 PM, ellaerdos wrote:

    Like global warming, its coming!

  • Report this Comment On March 02, 2014, at 2:39 PM, Duncan20903 wrote:

    It's really strange that there are so many people that are ignorant of the fact that the limited re-legalization of cannabis became effective in December 2012. The only part which "went into effect" on 1/1/2014 was the authorized retail distribution chain. That's still in compliance with the law enacted by the voters whic gave authorities until 12/31/2013 to promulgate the rule, regulation and licensing procedure.

    The Governors can just say no all they want. They're going to have just as much to say about re-legalization in their States as Governers Hickenlooper and Inslee had to say about it in Colorado and Washington.

    People have seen through the utter fraud of the absolute prohibition of cannabis and have come to realize that it's built on a platform of hysterical rhetoric and irrational fear. Neither of the two qualify as a sound basis for the formation of public policy.

  • Report this Comment On March 03, 2014, at 10:28 AM, BossIlluminati wrote:

    the greatest plant in the universe is almost free, LET FREEDOM RING!!!13

    these states are flipping from the inside out, just look at the polls, planning to get rid of any governor against

    "any doctor against marijuana is a doctor of death" - cali secret 420

    from 0 states to half the country, from low 20% approval to almost 70%, cali runs this planet by 2 decades, time to tie marijuana to the 2014, and 2016 elections, out with the old, in with the new

    20 years behind us southern states, sad and scary....nobody denies freedoms like the south, nobody…the top ten incarcerators on the planet are southern states...even if marijuana reforms did pass the republiCANTS in charge would deny you all your freedoms, centuries of matter though, we never planned on getting your backwards brethren from day one, half the country already but not one southern state, lol...

    Average spent per inmate a year = $31,286 (profit and police

    over people)

    Average spent per student a year = $10,605 (dumber and more

    in debt, each one of us is liable for around $40,000 of rising American debt)

    love and freedom forever, you do a great job fool


  • Report this Comment On March 25, 2014, at 10:07 AM, JeraldBlack wrote:

    no war on marijuana ! too bad for people who against marijuana there is no reason to against it . change new world ! you must accept it do not arguement about it. i support for norml . we already vote for norml . we already pass new laws we need them .no cigarette and no whiskey and beers. marijuana are less dangerous than whiskey and beers . now zip your mouth let them freedom and legal good day every one your business you want whiskey and cigarettes go ahead ! cry baby bye legalization marijuana yeah! no fool!!!

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2852896, ~/Articles/ArticleHandler.aspx, 9/2/2015 3:02:46 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Amanda Alix

Foolish financial writer since early 2012, striving to demystify the intriguing field of finance -- which, contrary to popular opinion, is truly what makes the world go 'round.

Today's Market

updated Moments ago Sponsored by:
DOW 16,215.09 156.74 0.98%
S&P 500 1,932.33 18.48 0.97%
NASD 4,694.26 58.16 1.25%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/2/2015 2:47 PM
BAC $15.66 Up +0.13 +0.84%
Bank of America CAPS Rating: ****
MA $89.91 Up +0.86 +0.97%
MasterCard CAPS Rating: *****
V $69.00 Up +0.04 +0.06%
Visa CAPS Rating: ****