While there have been bumps in the road for the legal marijuana industry, the past two decades have mostly been marked by progress. In 1996, California became the first state to legalize medical cannabis for compassionate-use patients. Since then, 27 other states and Washington, D.C. have followed. We've also witnessed residents in eight states legalize recreational pot since 2012.
This steady state-level expansion has led to the recent rapid growth in legal weed sales. In North America last year, legal pot sales jumped 34%, to $6.9 billion, according to ArcView Market Research, with Colorado seeing a very clear surge in legal marijuana sales. After generating $135 million in tax and licensing fee revenue on $996 million in legal sales in 2015, the Centennial State generated nearly $200 million in tax and licensing revenue last year as legal sales surged past $1.3 billion.
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At the heart of this expansion, and beyond just the desire of select state governments to boost tax revenue, is a softening stance on pot from the American public. National pollster Gallup, which has conducted marijuana polls for nearly 50 years, reported that support for nationwide legalization rose to 60% in 2016, an all-time high.
Similar figures were found in a recent CBS News poll, where 61% supported the nationwide legalization of pot compared to only 33% who opposed it. That's up 10% since April 2014, and 21% since Oct. 2011.
An NFL figurehead weighs in on marijuana (and you won't like what he said)
However, not everyone is happy to see marijuana gaining steam. On Capitol Hill, U.S. Attorney General Jeff Sessions could arguably be described as cannabis' most ardent opponent. In February, White House press secretary Sean Spicer warned of tougher federal recreational weed enforcement in the months to come, though it's still debatable how much tougher the federal government will get.
Even more recently, NFL Commissioner Roger Goodell, who is himself no stranger to scrutiny in the public's eye, weighed in on the possibility of medical and/or recreational marijuana use in the NFL. As you probably correctly surmised, Goodell tore down any hope that the NFL would become the first major sport -- and by far the most popular sport in the U.S. -- to allow its players to use marijuana without facing drug-testing repercussions.
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In a recent radio interview on ESPN's Mike & Mike, Goodell had this to say about medical marijuana use (quotes courtesy of Sports Illustrated):
We look at it from a medical standpoint. So if people feel that it has a medical benefit, the medical advisors have to tell you that. We have joint advisors, we also have independent advisors, both the NFLPA and the NFL, and we'll sit down and talk about that. But we've been studying that through our advisors. To date, they haven't said this is a change we think you should make that's in the best interests of the health and safety of our players.
If this sounds eerily familiar, it's because the U.S. Drug Enforcement Agency (DEA) passed on the opportunity to reschedule, or de-schedule, marijuana this past summer. Two petitions had asked the regulatory agency to re-examine cannabis, but the DEA found that there wasn't sufficient clinical evidence to suggest that marijuana had medical benefits that outweighed its risks.
Goodell also weighed in on recreational weed use, saying:
I think you still have to look at a lot of aspects of marijuana use. Is it something that can be negative to the health of our players? Listen, you're ingesting smoke, so that's not usually a very positive thing that people would say. It does have addictive nature. There are a lot of compounds in marijuana that may not be healthy for the players long term. All of those things have to be considered.
Why Goodell's comments matter
Some of you might be wondering why Goodell even deserves the time of day when it comes to the debate on marijuana. The answer is simple: It's all about ambassadors and impressions.
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Think about it this way: Nearly all major retail brands tend to lean on well-known ambassadors to help improve customer engagement with a brand. Under Armour leans on the NBA's Steph Curry and other big names, whereas Nike has LeBron James and a cadre of other leading athletes across a variety of sports representing its brand. The opinions of these celebrities and athletes help shape the public's opinion and drive engagement.
Even though Roger Goodell is the antithesis of the word "popular," he still represents the most popular sport/brand in this country – a sport that had an average of 16.5 million viewers per game during the 2016 season. That's a lot of eyeballs and opinions that could be influenced by Goodell's commentary, including lawmakers on Capitol Hill.
What we're left with is a growing bifurcation between the American public and those who make laws. Increasingly, the public would like to see the federal government softening its stance on pot, or legalizing marijuana altogether. Lawmakers, on the other hand, want more clinical evidence that marijuana is safe. Mind you, the Catch-22 is that this evidence is almost impossible to come by because of pot's strict schedule I status, which makes getting clearance to run scientific studies involving marijuana difficult.
The end result here is that Goodell's commentary is just another blow to marijuana stock investors who remain hopeful that the recreational weed industry will flourish in the United States. The U.S. marijuana industry already struggles to obtain basic banking services and is disallowed from taking normal business deductions. Goodell's comments simply reinforce that the highly popular NFL won't be a staging ground in support of change, at least for the time being, leaving investors to wonder where their white knight catalyst for change is going to come from.
