The odds have been plainly against marijuana legalization for decades, but the tide appears to be turning to the point where the marijuana movement may soon be able to get over its previous barriers.
At a crossroads
Two decades ago public opinion was very much against the idea of legalizing marijuana for medical or recreational purposes. A survey from Gallup in the mid-1990s pegged the public's favorable opinion on the drug at just 25%.
Fast-forward 20 years, and my how things have changed. The latest surveys conducted in 2014 from the General Social Survey and Gallup both showed that just over 50% of respondents favored the legalization of marijuana. A number of other recently conducted studies in swing states suggest that support for a federal approval of medical marijuana sits at 70% or higher.
For Americans, the legalization or decriminalization of marijuana would have two primary focuses. First, it would represent freedom from criminal prosecution (up to a certain amount of marijuana). More importantly, though, marijuana's possible legalization would give those who are sick with tough-to-treat and terminal illnesses the opportunity to benefit from medical marijuana. Currently 23 states have laws on their books allowing medical marijuana to be sold with a valid prescription, and although the indications of what qualifies varies from state-to-state, glaucoma and patients undergoing cancer treatment usually quality in all states.
The impetus to legalize for states is the potential to collect tax revenue from the sale of recreational or medical marijuana. Currently four states (and the District of Columbia) have marijuana legalized in both forms. In Colorado, one of the first two states to legalize the drug across the board in 2012, tax revenue totaled $699 million in 2014, more than $120 million higher than projections at the beginning of the year. This tax revenue can help close budget gaps and ensure that government employees stay employed.
One of the biggest hold-ups that's kept marijuana from being legalized nationwide is the uncertainty surrounding its long-term effects. However, that debate may have moved one step in the direction of legalization last week after a new study was unearthed by The Huffington Post that demonstrates perhaps another clinical benefit for marijuana.
Yet another clinical benefit for marijuana?
According to Dr. Edward Hagen, an anthropologist at Washington State University in Vancouver who led the study, 379 Aka pygmies of Africa's Congo Basin were surveyed, with the results showing that marijuana could lead to a reduction in parasitic infections.
Based on Hagen's research, 71% of the males studied and 6% of the females admitted to smoking marijuana. Researchers attributed the low levels of female marijuana smoking to the fact that most women between the ages of 18-40 were pregnant or nursing. Researchers confirmed the presence of marijuana by taking urine samples from the nomadic people, and 68% of the men had indeed recently smoked marijuana.
When stool samples were taken from all adult Aka, 95% were found to have some form of worm-based infection. However, lower numbers of worms were observed in those that had higher concentrations of THCA (a byproduct of THC) in their urine.
As The Huffington Post also notes, the results of this study weren't too different from petri dish studies that demonstrated marijuana could kill worms.
But, to be clear, one study doesn't confirm that marijuana is a killer of parasites, nor can researchers even connect the dots with any certainty that marijuana is the reason why certain Aka had low levels of worm burden while others had a higher level. Simply put, additional studies to determine marijuana's true effect (if any) on parasites will be needed.
The same problems persist
Even if optimists would prefer to chalk up another victory for marijuana, there are still a number of serious hurdles that the currently illicit drug may not overcome any time soon.
Perhaps the greatest challenge is that of gaining the attention of elected officials. President Obama has been asked on a handful of occasions recently what his opinion is regarding the potential for legalizing marijuana, either recreationally or medically. The president suggested that additional state legalizations would cause Congress to rethink the current laws governing marijuana, but also offered the opinion that Americans (particularly America's youth) focus their efforts on more important issues instead of marijuana. In short, marijuana isn't a priority of the Obama administration or the current Congress even if the American public's opinion of the drug keeps improving.
Another issue is that for decades researchers focused almost entirely on the risks of marijuana instead of its potential benefits. What this means is that researchers (and the government) have decades of negative data to sift through and only a handful of positive studies. Until more of these positive studies are given a chance to mature, it's probably going to be difficult for Congress or President Obama to support the legalization of medical or recreational marijuana.
That's bad news for GW Pharmaceuticals (NASDAQ:GWPH), the clearest beneficiary (in my eyes) of all publicly traded marijuana stocks if the federal government's opinion changes. Any rescheduling of marijuana away from schedule 1 (illicit) would be fantastic for GW Pharmaceuticals as it would remove some of the barriers the company faces when researching its cannabinoid compounds, and it would likely reduce costs. For now, GW Pharmaceuticals shareholders should expect the wait to continue.
Lastly, even within marijuana-legal states, not everyone is on the same page. In Colorado just a quarter of all jurisdictions have legalized marijuana, while the remaining jurisdictions still outlaw its recreational use or both its recreational and medical use. This piecemealed legalization could make a nationwide legalization practically impossible to implement.
When all is said and done, marijuana may boast plenty of potential for the opportunistic investor, but its future still remains far too clouded for investors to consider placing their bets.