Once considered a taboo topic, marijuana is now just as much a front-and-center issue as any of the others being discussed in this year's presidential debates. And it's certainly not hard to see why.
A national Gallup poll conducted in October showed that 58% of Americans were in favor of legalization, which tied an all-time high from a few years prior. Also, a national CBS News poll on medical marijuana legalization conducted in April 2015 showed even more resounding support, with 84% in favor of such a measure.
In states where marijuana is already legal, lawmakers are predominantly enjoying the drug's positive economic impact. Colorado has been the shining star of the group, namely because it was among the first two states (Washington was the other) to legalize recreational marijuana in 2012. In 2015 Colorado finished just shy of $1 billion in total combined medical and recreational marijuana sales. Further, these sales, along with licensing fees, added approximately $135 million in tax and fee revenue that the state is now using to pump money into education, law enforcement, and statewide drug abuse programs.
Marijuana's support hits a new record
However, last week the news got even better for the marijuana movement. A new survey was released by the Associated Press in conjunction with the NORC Centers for Public Affairs Research which analyzed opinion on substance abuse among 1,042 representative Americans. Among the drugs the respondents were questioned on was marijuana.
Based on responses from the AP-NORC study, a whopping 61% of respondents affirmed their belief that marijuana should be legal. This 61% is a new high-water mark when it comes to surveys that demonstrate national support for marijuana's legalization -- and it's surveys like this that give supporters in a number of states hope that this upcoming election season will bear a substantial number of victories for the marijuana movement.
In particular, grassroots campaigns in California, Ohio, Arizona, Massachusetts, and Florida are all looking to expand or introduce legal marijuana markets within their respective states. As we've previously examined, California, Ohio, and Florida could arguably be viewed as the three most important of the up-to-one-dozen states that could be angling for a marijuana initiative or amendment on this year's ballots.
An approval of recreational marijuana in California would be a key victory because of the sheer size of the state's economy. In Ohio and Florida, a victory would mean a changing tide: Ohio's marijuana initiative (known as Issue 3) failed in November 2015 because residents feared an oligopoly would emerge among growers, while Florida's high concentration of elderly voters did in a legalization measure during the November 2014 elections. Approvals in both states of medical and/or recreational marijuana would be seen as both a victory for the free market (in Ohio) and a demonstration that older Americans can't hold back what's becoming a strongly supported drug (in Florida).
Not a clear path to success
Of course, marijuana doesn't exactly have a straight shot to success even with these overwhelmingly positive top-line support figures.
The AP-NORC poll also asked the 61% of respondents who were in support of marijuana's legalization if there should be any restrictions on marijuana use. A third (33%) of the 639 respondents in the "yes" crowd believed that marijuana should be legalized without any restrictions. Another 43% believed that the drug should be legal, but purchase amount limitations should be put in place. The remaining 24% only believe that marijuana should be legal with a medical prescription.
Now, let's step back and really look at what we're being told here. A third of 61% want marijuana legalized without any restrictions, or roughly one in five people surveyed. A further 43% of the 61% who approved want to see limits on how much marijuana can be purchased. This works out to about 26% of all survey takers. Finally, around a quarter of the supporters want to see marijuana approved solely with a medical prescription, or about 15% of total survey takers. In other words, only around 46% of all people surveyed are really in support of marijuana's recreational legalization, and the majority of those still want the drug's sale to be regulated.
We see additional skepticism when analyzing various age ranges. Younger adults aged 18 to 29 overwhelmingly support the legalization of marijuana. More than four in five (82%) affirmed their support in the AP-NORC poll. Conversely, only 44% of Americans aged 60 and up support the legalization of marijuana. This is an important statistic considering that people are living longer than ever, so the older American population is growing, not shrinking. In select states, older Americans could prove to be quite the obstacle for marijuana's expansion.
Expect the bifurcation to continue
The AP-NORC survey's data suggests that we're liable to see a continuing bifurcation of the marijuana movement.
At the state level things seem to be motoring right along. It looks probable that a number of states will put marijuana initiatives in front of voters this year, and that quite a few could wind up passing. The more individual states that legalize medical and/or recreational marijuana, the stronger a case can be made that the federal government's stance on marijuana should be altered. More state approvals also mean more job creation within the industry.
On the flipside, this report suggests that most people still either don't want to see marijuana legalized, or they want some form of regulation (i.e., requiring a medical prescription or purchasing limit). This skepticism gives lawmakers on Capitol Hill all the more reason to sit on their hands until they have conclusive long-term safety data on marijuana at their disposal, which frankly could take many more years.
The problem with the wait-and-see approach on Capitol Hill is that it significantly hinders the growth capabilities of existing marijuana businesses. These businesses are selling a product that the federal government deems illegal, which means there's no ability to take normalized tax deductions. Additionally, most small, regional, and even national banks largely want nothing to do with marijuana businesses, leaving them with no access to checking accounts or credit lines.
Even though we could see strong expansion at the state level in November 2016, this isn't an investor-friendly industry as of yet. I believe the only way this industry does become worthy of investor dollars is if and when the federal government changes its stance on marijuana.