Yesterday, markets showed little conviction in either direction. The Dow fell a little. Gold rose a little. We keep our eye on them, but for no particular reason. Like the weather, they’re something to talk about.
An old friend contacted us last week with a business opportunity. More and more states – not to mention Canada – are making it legal for people to smoke weed.
“Look, we all know that the use of medical marijuana is not limited to terminal cancer patients. You just go to the doctor. You tell him you have a pain here or there. He prescribes the weed. If not, you get a different doctor.
“People don’t like to see young people smoking pot because they think it stunts their growth. I mean intellectually. And their careers. Marijuana seems to slow them down.
“But it’s not young people who are driving this trend. It’s older people. They tried it when they were young. And now they’ve got plenty of aches and pains. And they know marijuana can help them. And it won’t do them any harm. This market is huge. And it’s growing like – well, like a weed.”
Yes, dear reader, a new high; the Bubble Era is boiling them up everywhere. In asset prices. Record debt. Record junk bond issuance. Record household wealth increases. Heck, records were meant to be broken. When a high is registered, there is bound to be a new high coming down the pike sooner or later.
We checked into our hotel in Aiken:
“You’re aware of our smoking policy?” asked the desk clerk.
“No,” we replied. “Is smoking prohibited or obligatory?”
“Huh? Oh, you’re not allowed to smoke anywhere in the hotel.”
“Does that apply to medical marijuana, as well as tobacco?”
“Uh, you’re joking, right?”
But it was a good question. Dope is coming to America. Hotels are required to have ramps, elevators and wheelbarrows to haul their gimpy-legged guests. An ad in the newspaper told us that landlords, too, are required to cater to those who can’t get through the door on their two pins.
Soon, hotels may be required to accommodate potheads too. Why? It’s could be a medical condition, a federally-protected disability. Those with a doctor’s prescription will be able to puff the weed even in non-smoking places. And roach clips will be provided in the lobby!
Bill Bonner on markets, economics & the madness of crowds
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Forbes reports that marijuana stocks are hitting record highs, and minting their first billionaires:
You have probably never heard of Bart Mackay, a 57-year-old Las Vegas lawyer who works on various ventures like Dot Vegas, which operates the .Vegas top-level domain. But on paper, Mackay is the first pot-stock billionaire.
Mackay’s holdings in CannaVest (CANV -27.34%), which bills itself as the world’s leading hemp-based investment company, are valued at $1.8bn. That figure might seem like a drug-induced hallucination, but it’s technically true. CannaVest is the top-performing stock in America in 2014 with a market capitalisation greater than $1bn.
Its thinly-traded shares, which change hands on the Over-The-Counter Bulletin Board, or “pink sheets”, have soared by 680% in the last year. They are already up more than 300% in 2014. The average daily volume of about 10,900 shares has been light this year, but someone is buying the stock, and the $117 it closed at on Friday makes Mackay the world’s first pot stock billionaire thanks to his 15.7 million shares in CannaVest
“Let’s not delude ourselves,” continued our entrepreneurial friend, “this is a hostile takeover of a whole, multi-billion dollar industry. It’s all about control and money, not freedom. It will be heavily licensed, regulated and taxed. There will be a lot of money in it, it’s like the liquor business when they got rid of prohibition.
“If you legalised pot, prices would collapse. Nobody wants that. What they’re really doing is shifting the margins from the smugglers and dope dealers to the government. You’ll be able to get pot, without worrying about getting to jail or associating with shady characters. The quality is much higher than the stuff we smoked in college. And the people in the business – licensed producers, wholesalers, and retailers – will make a lot of money. So with the government. Everybody will be happy.”
We heard an example recently:
“Dad [67-years-old] was plagued all his life by depression. Practically ruined his life. Then, a woman at his church – at church! – introduced him to marijuana. Now, he smokes dope, and he’s fine.”
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