This New Marijuana Survey Tells You Everything You Need to Know About Public Sentiment
Sean Williams, The Motley Fool
Updated
There's a good reason why the marijuana industry is known as the green rush -- it has growers, distributors, retailers, and most importantly, investors seeing plenty of green.
According to a 2017 report from Marijuana Business Daily entitled "Marijuana Business Factbook 2017," legal U.S. pot sales are expected to grow by a whopping 45% in 2018, mainly on account of California opening its doors to recreational weed sales. As an aggregate, Marijuana Business Daily's report estimates a quadrupling in legal U.S. sales between 2016 and 2021, to about $17 billion. That pace of growth is hard for investors to overlook, which is a big reason why pot stocks have soared over the trailing year.
A man smelling the leaves of a potted cannabis plant.
Image source: Getty Images.
This new poll tells you everything you need to know about marijuana in the U.S.
The most telling aspect of the cannabis industry's rise has been the ongoing shift of how marijuana is viewed by the American public. Just a few days ago, Fox News released its latest survey detailing Americans' favorability and opposition to the idea of legalizing marijuana. Between 2013 and 2015, favorability had increased modestly, with 46%, 50%, and 51% favoring legalization in 2013, 2014, and 2015, respectively. However, in the January 2018 poll, which was conducted by Anderson Robbins Research and Shaw & Company Research on behalf of Fox News, an all-time record 59% of the 1,002 respondents favored legalizing weed.
Opposition to legalization also hit an all-time low since the question was first posed to the public by Fox News in 2013. After 49% of the public opposed legalization in 2013, just 32% now oppose the idea of legalizing marijuana.
Age certainly played a role, with millennials being the most likely to favor legalization, at 72%. Meanwhile, Gen Xers and baby boomers showed more modest support, at 60% and 52% respective favorability.
Political affiliation mattered, too. Those respondents who identified as Democrats or Independents strongly favored legalization, with 68% and 67%, respectively, supporting the idea. By comparison, people who identified as Republican were deadlocked 46% in favor and 46% opposed. Some 61% who described themselves as "very conservative voters" opposed the idea of legalizing pot.
Yet, here's what's really interesting about the opposition data: It's improving. Back in 2015, 59% of Republicans collectively opposed the legalization of cannabis, whereas just 46% do now. Likewise, 75% of "very conservative voters" opposed the idea of legalizing weed in 2013, meaning this opposition is down by 14 percentage points in just five years.
A person cupping cannabis leaves in their hands.
Image source: Getty Images.
That's now five polls with one clear consensus
The Fox News poll also aligns with four previous national polls that have been undertaken since April 2017. All of those polls have led to one clear consensus among the American public: They'd like recreational and medical pot legalized.
Gallup, perhaps the best-known national pollster, found in October 2017 that 64% of respondents favored legalization. Comparatively, that's up from just 25% who favored the idea of legalization back in 1995, the year before medical cannabis was legalized in California. Additionally, Gallup's survey showed a slight favorability toward legalization for Republicans for the first time ever.
Similar favorability has been seen with the CBS News survey, Pew Research Center poll, and independent Quinnipiac University survey. A respective 61% of respondents across all three surveys favored legalization, even with the question worded differently in all three polls.
It's worth noting that Quinnipiac's survey questioned respondents on medical marijuana, too. Its August 2017 poll found 94% of them support legalization and just 4% are opposed the idea.
A book on federal and state marijuana laws next to a gavel.
Image source: Getty Images.
Opinions won't move the needle with this administration
Unfortunately, opinions aren't going to be enough to change pot's schedule in the United States. Currently a schedule I drug, cannabis is recognized as a wholly illegal substance with a higher potential for abuse and no recognized medical benefits.
What's more, its classification as a schedule I substance is making life difficult for pot businesses, even in states that have legalized marijuana in some capacity. Medical researchers looking to get benefit-versus-risk studies underway are buried under red tape. Meanwhile, cannabis businesses are unable to take normal corporate income-tax deductions, and they have little or no access to basic banking services. This even includes something as simple as a checking account, in most instances.
Making matters worse, Attorney General Jeff Sessions is waging an all-out war on the marijuana industry. Long known as an opponent of pot, Sessions announced on Jan. 4, 2018 that he'd be rescinding the Cole memo. This memo was a loose set of "rules" created by former Deputy Attorney General James Cole under the Obama administration that legalizing states would follow to keep the federal government off their backs. This included keeping adolescents away from marijuana and ensuring that weed grown within a state stayed in that state. Rescinding this memo opens the door for state-level prosecutors to use their judgment in bringing pot charges against people or businesses, even in legal states.
As long as Sessions is the Attorney General, little progress will be made on the cannabis front in the United States.
Dried cannabis buds atop miniature Canadian flags, and next to a piece of paper with the word yes written on it.
Image source: Getty Images.
Investors should look elsewhere
Truth be told, the U.S. could very well be the most lucrative cannabis market in the world... if it were legal. Cowen & Co. has suggested that the U.S. legal weed market could be worth $50 billion by 2026, depending on its scheduling. However, that legalization could be years off -- if it ever occurs.
If you're an investor, you shouldn't be lured in by a clearly challenged U.S. market. Instead, marijuana stock investors would be wise to focus on the Canadian cannabis industry. Canada legalized medical weed back in 2001, and its medical industry has been expanding at a double-digit percentage pace, thanks to the oversight of Health Canada.
The Canadian parliament is also currently reviewing a bill introduced by Prime Minister Justin Trudeau in April 2017 that could legalize recreational cannabis by July 2018. This would allow Canada to become the first developed country in the world to legalize adult-use pot. If approved, Canada's growers could see $5 billion in added annual revenue once fully ramped up.
While there are a number of intriguing marijuana stocks to consider, MedReleaf(NASDAQOTH: MEDFF) is the perfect example of a pot stock worth digging into. Having gone public less than a year ago, MedReleaf has used its initial public offering proceeds and a recent bought-deal offering to grow its capacity at its Bradford, Ontario facility. Not only will the company benefit from growing demand if recreational weed is legalized, but as a major producer of cannabis oils, a pricier and higher margin product than dried cannabis, the company will be able to make more money on an equivalent amount of sales, relative to its peers.
As the marijuana industry expands, Canada appears to have the blueprint for success.
Sean Williams has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
