This article was updated on Oct. 15, 2016, and was originally published on Sept. 13, 2015.
Marijuana continues to be a highly polarizing issue for the United States. Despite growing momentum for the marijuana industry, highlighted by more than two dozen states passing medical marijuana legalization laws and four states also allowing for marijuana to be sold legally for recreational purposes, marijuana is facing a veritable mountain of hurdles.
Marijuana can't catch a break
To begin with, legal marijuana businesses are dealing with an abundance of financial issues. Most traditional banking services are out of reach for marijuana shops and growers because the federal government still views the plant as illegal. Banks are concerned that they could face prosecution in the future or lose their loans if the government's hands-off approach to marijuana management changes. Thus, they've simply kept their distance.
Federal tax laws are also working strongly against the marijuana industry. Because federal tax law supersedes state law, marijuana shops are unable to take normalized deductions for their business since they are selling an "illegal drug." The result is marijuana businesses are paying far more in taxes than they would be if they were selling practically any other product.
The current administration also has no interest in quickly changing the federal government's stance on marijuana. With a critical election upcoming in 2016, a move to legalize marijuana prior to then seems unlikely.
But, arguably, the biggest issue for marijuana is its long-term safety. Lawmakers are unlikely to change their tune on marijuana until it can be decisively shown through clinical studies that marijuana poses no long-term threat to the physical or cognitive functions of the body and brain of a user.
In Aug. 2015, researchers got a look at one such long-term study in adolescents, and the news (or should I say lack of news) was encouraging if you're a proponent of legalization.
No news is good news
The study, which was undertaken by researchers at the University of Pittsburgh Medical Center and Rutgers University and published in the Psychology of Addictive Behaviors, began tracking 14-year-old males in Pittsburgh public schools beginning in the late 1980s. A database continued to track these adolescents until 2009-2010, when these individuals were 36 years old. The idea of the study is to establish what effect, if any, marijuana had on physical and mental health conditions, such as asthma, depression, high blood pressure, and psychotic illnesses.
The participants were split into four groups for the study. The largest group contained marijuana non-users (46%), following by early chronic users (22%), late-adolescent users who continued using marijuana throughout the lives (21%), and those that used marijuana only during adolescence (11%).
The findings showed that there were no statistically significant physical or mental health differences observed between any of the four groups between the late 1980s and 2009-2010. Furthermore, despite certain controls not being accounted for, researchers note that chronic marijuana users had no worse health prognosis than any of the other groups in the study.
Researchers from both universities were steadfast in pointing out that this isn't an end-all study, but merely represents another piece of the puzzle to resolving marijuana's long-term safety profile. Additionally, researchers suggested that the intellectual and cognitive effects of marijuana aren't covered by this study and still need to be explored as potentially having an effect on users over the long term.
An open door for more research
If the aforementioned study demonstrates anything, it's that there's plenty of room for additional research into the effects of marijuana on the body and mind. With the Obama administration removing some of the red tape associated with marijuana research earlier this year, it would seem to agree as well.
In recent years, we've witnessed a handful of studies that have suggested marijuana could actually be of benefit to patients with certain diseases. From aggressive brain cancer to type 2 diabetes, marijuana and its cannabinoids have demonstrated promise in helping to treat or ease symptoms associated with deadly and/or chronic diseases.
At the forefront of that research is GW Pharmaceuticals (NASDAQ:GWPH), a U.K.-based biopharmaceutical company that's discovered more than five dozen cannabinoids from the cannabis plant. GW's hope is to use the cannabinoid receptor system found within the human body to effect positive biological change, and it's currently researching about 10 different indications to that end. The most promising product in its pipeline is Epidiolex, a treatment for two rare types of childhood-onset epilepsy. In late-stage studies, Epidiolex hit its primary endpoint of a statistically significant reduction in convulsive seizures for patients with two rare epileptic diseases, Lennox-Gastaut syndrome and Dravet syndrome. GW could be well on its way to getting Epildiolex on pharmacy shelves and validating the use of cannabinoids in medical research.
A quick reality check
However, for the marijuana investor, this latest study offers no solace. Puzzle pieces can take a long time to come together before lawmakers are going to feel comfortable enough to take a stand as to whether the drug should be legalized or not. Meanwhile, most marijuana businesses continue to lose money or are struggling to stay profitable. We also have to remember that this is as much of a learning experience for the local, state, and federal government as it is for the shop owners, processors, and marijuana growers.
Ultimately, betting on marijuana to turn into a success story remains just as much a gamble today as it did previously. Even though momentum is squarely in the sails of the marijuana industry, the hurdles that remain don't look as if they're going anywhere anytime soon. Thus, the safest place for your money remains as far as possible away from the marijuana industry.
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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