The 7 States Slamming the Door on Legalized Marijuana

Most governors are not in favor of legalizing weed in their home states – despite the promise of added tax revenues

Mar 2, 2014 at 1:29PM

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.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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