Wanda Sykes had a
"I called my broker, I was like, 'Hey, put all my money in weed,'" she said to uproarious laughter. "Price of weed never goes down. That's a real blue chip right there!"
Explaining jokes never makes them more funny, but it's telling that the reason this was so funny in 2003 is the absurdity of a broker devising a cannabis investment strategy. But today there are dozens of firms
Despite that investment enthusiasm, cannabis as a consumable commodity is in its infancy — unlike the Prohibition era, there was not a large cannabis market in place before it was banned in the 1930s, notwithstanding the considerable market for hemp. And for better or for worse, the growth of cannabis as an investment vehicle has been stymied by its illegality at the federal level; banks, particularly large banks, can't deposit ill-gotten gains, credit cards can't process illegal transactions and the bulk of the investment world won't put money into ventures that could easily go up in smoke.
That isn't to say that the cannabis business is struggling — while Sykes
On the surface, this arrangement seems a little silly —
But just as these payment workarounds have evolved in this emerging gray market economy, the federal prohibition of cannabis may have evolved a purpose as well — namely to keep Wall Street out of the cannabis business — and that's a benefit that we shouldn't be too hasty to part with.
One might expect that if either federal prohibition ends or Congress passes the Secure and Fair Enforcement Act — the bill that would allow banks and credit card networks to serve cannabis businesses — the result would give
Consider for a moment how the
I realize this sounds prudish, and perhaps it is. I know myself well enough to know that I don't have a well-founded opinion about the public health benefits or harms of cannabis legalization, but to the extent that there is harm, at the very least those harms can be mitigated with laws and regulations — much the way they are mitigated with respect to alcohol and tobacco. But all of that starts with the assumption that cannabis isn't the same as Pepsi, and the investment world should be restricted in its ability to create new customers — or entice old customers to keep using.
The cultural acceptance of cannabis in the United States has grown over the course of the 20th century without any help from advertising and capital markets. But right now we're in this moment when the cannabis genie is halfway out of the bottle, and Congress has a chance to determine what kind of sensible restrictions might be put in place to keep legal cannabis from being overdone. The SAFE legislation makes sense in that it ends a meaningless Kabuki theater that has arisen to facilitate pot sales, but if Congress wants to enact meaningful policy, it's going to have to try harder.