Marijuana Pixabay
Image source: Pixabay.

The year may have only just begun, but 2016 is shaping up to arguably be the most important in marijuana's history.

Don't get me wrong, we've witnessed a number of marijuana milestones over the last two decades. In 1996, California became the first state to approve the use of marijuana for medicinal purposes. Since then 22 additional states, along with Washington, D.C., have also legalized its use for select ailments. In 2012, residents in Washington state and Colorado voted in favor of legalizing marijuana for recreational use in persons aged 21 and up. And, just last year, the federal government relaxed research standards and removed many of the hoops researchers needed to jump through to conduct studies into the benefits and/or risks of marijuana.

2016: A big year for state-level legalization?
This year could be even more profound. It's possible that roughly one dozen states could have some form of medical, recreational, or medical and recreational, initiative or referendum on the ballot for voters to decide. As we saw last week, in Vermont things may be decided solely at the legislative level for the first time ever. In other words, the upcoming elections could expand marijuana's influence at the fastest pace in history.

But, of course, there's still one major hurdle -- the one cloud that continues to overhang the industry and keeps the federal government from considering the decriminalization or legalization of marijuana on a national level. Namely, the long-term safety of the drug.

Phil Cdc

Image source: Centers for Disease Control and Prevention.

For decades researchers have been examining the potentially harmful effects of using marijuana, giving lawmakers an extended look at what risks the drug could pose. But only in the past decade, or even less, have researchers really been supplementing the other side of the coin and looking at the possible benefits of marijuana. For marijuana supporters and businesses alike, the best thing that can happen, aside from continued state-level approvals, is for researchers to make key discoveries that marijuana is either beneficial or considerably less harmful than once believed.

One such study, which was published earlier this month in the Journal of Psychopharmacology, could indeed be a stepping stone for marijuana supporters.

This marijuana study could stir the pot for legalization
The study involved a half-dozen London-based researchers who set out on examining the effect (if any) of cannabis on 2,235 teenagers. Previous studies have suggested a correlation between cannabis use and lower IQ scores, so researchers were curious if cannabis was the factor to blame.

In the Avon Longitudinal Study of Parents and Children, children had their IQ tested at the age of eight, and then once more at the age of 15. According to the study, some 24% had tried marijuana at least once by age 15, and 3.3% had used marijuana at least 50 times.

Images

Image source: Flickr user Alberto G.

Now here's where things get interesting. The researchers' findings did show that cannabis users, especially those who were habitual users, score lower on IQ tests compared to non-users. But, researchers concluded that marijuana does not appear to be to blame. When a number of linear regressions and other control factors were applied, and adjustments were made, the IQ scores of modest users and non-users did not differ. Essentially, what researchers discovered was that other external factors, and the use of potentially IQ-altering products, such as alcohol, appear to be the more likely culprits behind the lower IQ readings, and not cannabis.

In the words of researchers,

"After adjustment to account for these group differences, cannabis use by the age of 15 did not predict either lower teenage IQ scores or poorer educational performance. These findings therefore suggest that cannabis use at the modest levels used by this sample of teenagers is not by itself causally related to cognitive impairment. Instead, our findings imply that previously reported associations between adolescent cannabis use and poorer intellectual and educational outcomes may be confounded to a significant degree by related factors." 

Worry over the general safety of the drug and adolescent use is one of the primary reasons marijuana remains a schedule 1 drug at the federal level, and studies like this could help the movement towards legalization, or at least decriminalization.

Inaction to be expected
The results from the U.K.-based study are good news for the marijuana industry as a whole, but it's not a game-changer from the perspective of Congress. Think of understanding marijuana's safety as trying to put together a 50,000-piece puzzle, and the U.K. study is just one of those pieces. Lawmakers in the U.S. simply don't believe they have a broad enough set of data to make a longer-term determination on marijuana -- and so we wait.

Images
Image source: Flickr user Tony Webster.

Furthermore, being in an election year Congress is liable to be more tied up with political wrangling and larger macroeconomic issues such as job growth than it is with the potential legalization of marijuana. Until recently the idea of bringing marijuana up as a topic in an election was considered taboo, so most politicians have chosen to take a "wait-and-see" approach to the drug.

If 2016 turns out to be a stalemate of a year at the federal level, it'll mean more of the same challenges for marijuana businesses and a continually tough environment to make money for investors. With the federal government unwavering on its view of marijuana as illegal, it means marijuana-based businesses have no easy access to capital since banks have to jump through a number of loopholes to work with the industry, and it also means a tax disadvantage since marijuana-based businesses have no ability to take normal business deductions. That's a formula that slows expansion and lowers profitability, which isn't exactly a recipe for success from the standpoint of investors.

It's true that marijuana has plenty of potential if the federal government ever does change its stance, but until such time (if that time ever comes), marijuana remains a risky investment that may be best off avoided.

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Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen nameTrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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