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Source: Flickr user Isabel Mancera

Comparatively speaking it's been a good year for proponents of the legalize marijuana movement with two new states (Oregon and Alaska) and Washington D.C. joining Colorado and Washington as the only areas where recreational marijuana can be legally sold.

It would have been a nearly flawless year had Florida voters not narrowly voted against legalizing medical marijuana. Within Florida the amendment to allow medical marijuana to be prescribed needed a 60% "yes" vote as opposed to the traditional 50% that would normally have approved a bill because it would have required Florida to amend its constitution. In Florida's case just 58% of residents voted in favor of medical marijuana's legalization, thus causing the amendment to be defeated. However, 23 states and Washington, D.C., have approved marijuana for medical use as of today.

Although we're just weeks removed from the midterm elections the chatter has already begun as to which state could be next to legalize marijuana on a recreation or medical level. Earlier this month I opined why California could wind up being a make-or-break state for the marijuana movement. However, California isn't expected to bring an adult-use marijuana initiative to its residents until 2016 at the earliest. Instead, a considerably smaller state could be readying to throw its hat in the ring as the fifth state to legalize recreational marijuana: Rhode Island.

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Source: Flickr user Taber Andrew Bain

Little state, big battleground
Regulate Rhode Island, which is made up of a consortium of recreational marijuana supporters and organizations, has plans to push the Rhode Island General Assembly to put adult-use marijuana on the ballot in 2015. Known as the Marijuana Regulation, Control, and Taxation Act, if passed it would make Rhode Island just the fifth state in the U.S. to have legalized recreational marijuana.

Yet if the responses from two recently conducted Providence Journal polls on recreational marijuana tells us anything it's that voters are still largely uninformed.

Though Providence Journal will be the first to admit that its studies were not conducted in a scientific fashion (i.e., some people may have done both polls and some may not have), there was an almost comical gap of opinion when respondents were asked whether or not they approved of legalizing marijuana on an adult-use basis.

The first poll asked respondents this:

Has the time come for Rhode Island to legalize recreational use of marijuana?

As of Nov. 19, 2014, Providence Journal's poll had collected around 14,300 votes with a whopping 74% voting against the legalization of recreational marijuana compared to a mere 26% saying "yes."

A second poll from Providence Journal asked the same basic question, but worded it a bit differently:

Should Rhode Island regulate and tax marijuana sales?

As of Nov. 19, 2014, the second survey had far fewer responses (just shy of 1,800), but the message was clear: 68% of respondent voted "yes" that Rhode Island should regulate and tax marijuana sales. Just 32% voted "no."  

Confusing, right? It's the same basic idea of whether or not adult-use marijuana should be legalized, but the mere wording completely changed the outcome of the voting.

Three key takeaways
To some degree these poll results can be taken with a grain of salt as they weren't conducted with any scientific intent, but the sheer gap between both results leads me to three critical takeaways.

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Source: Insys Therapeutics

First and foremost, emotions surrounding medical and recreational marijuana are heightened, and if you're an investor that's a dangerous thing. Emotions and investing don't mix well, and it's possible the valuations of marijuana stocks, both penny stocks and the viable alternatives likes GW Pharmaceuticals (NASDAQ:GWPH) and Insys Therapeutics, may simply be without justification.

It's not uncommon for stocks to be perceived as being overvalued or undervalued based on emotional trading, but some marijuana penny stocks take this to a new level entirely based on their lack of funding and/or experience in the medical or recreational marijuana industry. Even a company like GW Pharmaceuticals, which has a multidrug clinical pipeline and has returned in excess of 1,600% over the past 15 months, is arguably a dangerous investment. Its only approved drug, Sativex, hasn't sold particularly well (Sativex isn't approved in the U.S.) and the company is on pace to lose somewhere between $125 million and $175 million through 2017.

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Source: Flickr user Fibonacci Blue

Secondly, residents want to find ways of boosting tax revenue without directly absorbing tax hikes themselves. In May Providence Journal reported that Rhode Island was looking at a budget deficit of approximately $67 million in 2015. Therefore legalizing and taxing recreational marijuana, which bears a likely double-digit excise tax as well as a state sales tax of 7% in Rhode Island's case, could help bridge this gap in future years. The prospect of generating tax revenue through recreational marijuana sales so as not to boost taxes in other areas statewide could be a dangling carrot that's used in a number of states to vie for approval.

Finally, I believe these polls highlight the reality that the American public is still mostly in the dark about the benefit versus risk profile of marijuana. To some extent that's not the public's fault because very few studies have been conducted that have looked into the medical benefits of long-term marijuana use. Yet having read conflicting reports on the safety of marijuana over the long run I suspect it's going to be years before researchers will have enough data to conclusively lay out the benefit and risk profile of marijuana for Americans to ponder.

As I've opined previously, marijuana's market potential is huge. Unfortunately, the pieces of the puzzle simply aren't there for investors as of yet. That certainly could change in the future, but for now your best bet as an investor is probably going to be sticking to the sidelines.

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 name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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