“Marijuana may not be addictive, but money certainly is.” – University of Denver law professor Sam Kamin

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How long will it be before publicly traded marijuana-producer/seller companies are listed on the NYSE or NASDAQ?

Will pot company execs someday be ringing the bell and/or pounding the gavel on Wall Street?

Will they be issuing SEC-mandated 10-Q quarterly earnings releases (how high can this stock go?), uploading 10-K annual reports, producing material 8-K filings about mergers, acquisitions and restructurings and holding shareholder meetings?

Will there be handouts for investors?

Preposterous you say? Maybe not.

“…Advocates have waged savvy campaigns…presenting a clean-cut, besuited image worlds away from the tie-dyed stereotype.” – The Economist, “High Time.”

The argument has been made for Amendment 64 (e.g., Regulate Marijuana Like Alcohol Act) in Colorado. Washington and other states that marijuana should be legalized, taxed and regulated.

Does that eventually include the SEC, the Securities Exchange Commission?

How about the FTC, Federal Trade Commission? And maybe even the Financial Standards Accounting Board, FASB. Will publicly traded marijuana companies report quarterly earnings using both GAAP and Pro Forma accounting?

If there are sky-high profits to be made as a result of legalization, taxation and regulation of marijuana, shouldn’t the Military-Industrial Complex crowd get its cut on the action?

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If the trend continues toward nationwide marijuana legalization,(federal DOJ is not enforcing in states that vote for medicinal marijuana and other uses), logic dictates that after a few years in “test” markets such as Colorado and Washington, eventually companies may acquire these firms and add marijuana to their product portfolios.

Some may even decide to directly enter the production/marketing of marijuana sector, dominate market share and eventually spin out a marijuana division as a highly covered IPO.

Ready for NASDAQ: WEED?

What does this big profits specter mean to the backyard grower, who is looking to raise a few extra bucks? Has this person ever heard of the term, “economies of scale?” Once a Philip Morris … err … Altria Group, Inc. gets into the market with its legendary ability to produce and sell in massive volume could easily result in the dreams of these small growers going up in smoke.

Think of it this way, a company that markets cancer-causing Marlboros or essentially the burning and smoking of highly addictive doctored tobacco leaves is not going to have any moral qualms about the burning and smoking of pot leaves, particularly if there is a huge profit margin attached to these sales.

CNBC’s “Mad Money” Jim Cramer was posing the hypothetical question as to whether investors should add addictive “sin” stocks to their individual portfolios in 2014. Naturally, Altria Group or NYSE: MO was on the list. There was also Diageo plc (NYSE: DEO) that markets high-end whiskies, vodkas and liquors. Ditto for Wynn Resorts Ltd. (NASDAQ: WYNN) that operates gambling resorts. Could these sinful companies be persuaded to dip into the marijuana market once the legalize-tax-regulate advocates have won the day?

Is the Pope, Catholic?

There may also be a genetically modified marijuana play for Monsanto (NYSE: MON) and a counter wholesome organic effort by Whole Foods Market (NASDAQ: WFM).  Think of the marketing and branding possibilities and the competing television ads during future Super Bowls. Move over erectile dysfunction.

Marijuana is not only consumed in smoked form, but in brownies and other pastries. There may be a great opportunity for General Mills (NYSE: GIS) that serves as the custodian of the Betty Crocker brand. Will this be the time to expand the reach of the company’s markets and upgrade the brand at the same time?

Marijuana brownies would completely change the way we think of the image of Betty Crocker with her apron.

Just as the fictional Nick Naylor from Thank You for Smoking embodies the image of the fast talking PR pro for the tobacco industry, will there be female and male counterparts for publicly traded marijuana companies? The legalize-tax-regulate crowd has already proven they can win the day, at least in some states, when it comes to marijuana. Surely future Nick Naylors can artfully defend the rising top and bottom lines and expanding gross margins of marijuana companies.

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Tobacco, booze, gambling and other perceived sinful companies have not only survived, heck some are very profitable with decent reputations and brands. Couldn’t the same be true for publicly traded and SEC regulated marijuana companies?

There is money to be made on Wall Street. Why shouldn’t SEC regulated publicly traded marijuana companies make big-time profits emanating from a newly legalized, taxed and regulated market?

http://www.economist.com/news/united-states/21593467-colorado-embarks-unprecedented-experiment-high-time

http://www.economist.com/blogs/economist-explains/2014/01/economist-explains-1

http://www.economist.com/news/united-states/21573135-americas-first-market-recreational-marijuana-will-be-far-free-tax-and-tax-again

http://www.stockpickr.com/rhinostocks/portfolio/sin-stocks-january-2014/

http://seekingalpha.com/article/1156521-5-marijuana-stocks-going-crazy-and-this-could-be-just-the-beginning

http://time.com/4044698/willie-nelson-pot-brand/

 

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