Throughout history there have always been people vehemently opposed to fun.
They’re the ones marching with signs, slapping rulers down on wrists, and doing buttons up right to the collar.
The morally righteous, pedantic types that like to ruin things for the rest of us.
On their own, they’re relatively harmless. If you know one, you’ll know they certainly don’t inspire any fear. But that all changes when they get decide to together and *shudder* ‘change society for the better’.
Case in point is the Prohibition era of the 1920s, where pious individuals worked tirelessly to rid the streets of all their much-loved bars, and force people back into their homes where they would remain sober and virtuous.
And from 1920 to 1933, they were successful. All the booze was poured down street drains and thousands of Federal Prohibition Agents were tasked with ensuring not a drop touched the public’s lips.
But as is always the case when government tries to stifle personal freedom, the people found a way around it. Not by bootlegging — although that was immensely popular at the time. But by demanding their right to the wondrous health benefits of whiskey.
Source: The Vintage News
[Click to open new window]
After only six months of prohibition, over 15,000 doctors and 57,000 pharmacists attained licenses to prescribe or sell medicinal booze. And by taking the place of bartenders, from 1921 to 1930, US doctors earned around $40 million from prescribing whisky for ‘therapeutic’ purposes.
Believe it or not, although Prohibition is long dead, 18% of Americans still believe ‘that drinking should be illegal’, according to a nationwide CNN survey from 2014. Although thankfully, it’s unlikely that the US government would heed their demands again.
However, the morally righteous still exercise power in other ways. As it’s very easy to draw parallels between the attitudes towards alcohol a century ago, and the current barriers put in place towards marijuana use today.
Marijuana is a plant that, through misinformation and scare campaigns, has also been demonised since the 1920s.
It’s been called an ‘assassin of youth’ and an ‘evil sex drug’ by the Reefer Madness campaigns of the 1930s. And this conception of marijuana as highly addictive, dangerous substance has been peddled in the media and by politicians of all classes.
Although governments around the globe are finally opening up their minds to the possibility that perhaps marijuana isn’t as evil as once thought, they’re still not making it easy for the public to get their hands on it.
As a result, the move away from cannabis prohibition is taking a lot longer than it should. But looking at the booming markets in the US and Canada, we are slowly but surely moving in the right direction.
While this has been happening, much like the pharmacists of the 20s, companies have started peeking their heads around the corner to get a look at the pot of gold slowly being built. And as the dreaded era of cannabis prohibition begins to subside, they’re now starting to dip their hands in.
More than a sugar high
It’s not a new phenomenon for companies to take advantage of the public’s taste for mind-altering substances. I don’t need to list the hundreds of thousands of companies which sell an even larger range of alcoholic beverages — the $1.44 billion global industry speaks for itself.
If we’re to put sugar and caffeine in the category of mind-altering substances, that figure grows even larger. And it stands to balloon into the stratosphere if you consider the myriad of substances that are yet to be utilised commercially.
As we all know, half the reason for Coca-Cola’s iconic name is its original recipe. When pharmacist John Pemberton tried to fill the massive wine-shaped void Atlanta’s Prohibition had left in 1886, he created a drink made of soda water, kola nuts, fruit flavours and most famously, coca leaves (cocaine).
No one is entirely sure how much cocaine was included in the original recipe. But it was surely enough to ensure that sugar and caffeine weren’t the only things you were getting high on.
Interestingly enough, Coca-Cola still uses the coca leaves to this day, although as an executive told The New York Times:
‘Ingredients from the coca leaf are used, but there is no cocaine in it and it is all tightly overseen by regulatory authorities.’
As trading coca leaves is illegal in the US, Coca-Cola has a unique arrangement with the Drug Enforcement Administration which allows the company to import cast quantities of coca leaves from Peru and Bolivia.
I for one find it somewhat surprising that a private company is able to so easily access and distribute a product derived from cocaine with no qualms. While even in states and nations where medicinal cannabis is legal, patients with a script experience extreme difficulty when trying to gain access to medicine they’re entitled to.
But while governments continue to make the process of legalisation slow and bureaucratic, private companies are lining up to get their hands on products which could soon rival the alcohol and tobacco industries combined.
Much like Coca-Cola takes out the active ingredient from cocaine, many companies are doing the same thing with the active ingredient of THC in cannabis. In places like Canada and California, we’ve seen marijuana-infused oils, health drinks and even chocolates released by niche brands to the delight of the public. And as the money keeps pouring in, the major brands we all know and love have been watching intently.
As Forbes reported on 14 March:
‘…major brands are either dipping a toe into the water or laying the groundwork for a cannonball-level splash when the Green Rush finally breaks.’
We may be a ways off a cannabis infused Coca-Cola, but the possibilities are truly endless at this point. Especially when you consider that Coca-Cola, Budweiser, Marlboro and Corona have already begun dumping billions of dollars into pot stocks.
What’s important to take away from this is that as attitudes change and markets open, fortunes can be made on legal cannabis — both medicinal and recreational. And if the biggest companies around the world are already getting in on the potential profits, why shouldn’t you?
This week in Money Morning
How bad do things have to get before you’re willing to lose money just to keep your capital safe? This sounds crazy to you and me. And until recently, it was. But as Harje wrote on Monday, we could soon be entering a climate where it becomes necessary again.
To learn more, click here.
Then on Tuesday, Murray imparted a simple lesson in reference to markets: No one knows the future. When you accept that statement without reservation your whole approach to the very big problem of navigating the markets changes drastically. You don’t need to work out what the future is. You need to manage your risk effectively in an uncertain environment.
To read the full article, click here.
On Wednesday, Murray followed on by explaining a few technical strategies he has for trading which are based on concepts that he has been working on for decades. He also explained his entry and exit methods which are based on being either aggressive or conservative.
If you’d like to learn how you can apply his methods to your own trading, click here.
The property market is on the nose and will probably get worse if Labor wins the upcoming election. The eradication of franking credit refunds for retirees who don’t pay tax will also hurt. So there aren’t a lot of options left for someone who is eager to build their wealth as they head towards retirement in the next decade or two. But as Murray wrote on Thursday, there are still pockets for wealth creation hidden in the shadows.
To learn more, click here.
Then on Friday, Harje returned from the Grant’s Interest Rates Observer Conference with a wealth of new investing strategies. On the topics of gold, emerging market debt, crypto and even art, Harje has some very valuable insight to impart.
To read his full article, click here.
Until next week,
Editor, Money Weekend