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California patients wait for assistance at a marijuana dispensary.

It is called a lot of things: grass, pot, Mary Jane, wacky weed. Now, researchers are suggesting a new moniker for marijuana: alternative investment.

 

A report out this week on the US medical marijuana market estimates the unconventional business already generates $1.7 billion a year. But the market could grow fivefold in short order, study says, as more states legalize pot for treating a variety of illnesses and more patients try it.

The study, conducted by See Change Strategy for the American Cannabis Research Institute and Deal Flow Media , a financial research firm specializing in unusual assets, says that of the nearly 25 million Americans who are potentially eligible to use medical marijuana based on their diagnoses, fewer than 8,00,000 currently do.

That makes the nascent market a potentially attractive one for investors looking for alternatives to the more traditional investment options like art, antiques or coins. The opportunities, the authors say, aren’t confined to cultivation and distribution — the riskier parts of the business.

But the authors, who surveyed 300 medical marijuana industry insiders, point out that the fastgrowing market faces daunting hurdles. These include inadequate access to legal capital, unfavorable tax status, a lack of experienced executives, downward pricing pressure and a complex and contradictory web of state and federal rules.

All this makes investing in marijuana a risky proposition. There’s also the very real potential for conflict with criminal gangs who control the larger $18 billion a year illegal US marijuana market. These conflicts tend to get settled outside the judicial system.

Via Times of India

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