The United States is gradually becoming the land of the red, white, and green.
Starting January 1, it will be legal to smoke marijuana for medical use in 29 states, and Americans will be able to toke up without a doctor’s letter in nine states. Support for the drug reached new highs in 2017. A Gallup poll showed that 64% of Americans favour legalization, and even a majority of Republicans back it.
The booming industry was expected to post nearly $US10 billion in sales in 2017.
Here’s a summary of where Americans can legally light up in 2018.
Adults 21 and over can light up in Alaska. In early 2015, the northernmost US state made it legal for residents to use, possess, and transport up to an ounce of marijuana – roughly a sandwich bag full – for recreational use. The first pot shop opened for business in late 2016.
Alaska has pounced on the opportunity to make its recreational pot shops a destination for tourists. More than two million people visit Alaska annually and spend $US2 billion.
The first state to legalise medical marijuana in 1996, California became even more pot-friendly in 2016 when it made it legal to use and carry up to an ounce of marijuana.
California began issuing temporary licenses to dispensaries in December that will allow those stores to sell nonmedical marijuana. The licenses will become valid on January 1, 2018.
But that doesn’t mean all Californians will be able to buy marijuana at the stroke of midnight. Many cities in the Central Valley, including Fresno, have moved to ban recreational sales.
State rules dictate that marijuana will not be sold between the hours of 10 p.m. and 6 a.m.
In Colorado, there are more marijuana dispensaries than Starbucks and McDonalds locations combined. Residents and tourists alike can buy up to one ounce of weed there.
The state joined Washington in becoming the first two states to legalise recreational marijuana in 2012.
A ballot initiative gave Mainers the right to possess up to 2.5 ounces of marijuana, more than double the limit in most other states. But that doesn’t mean residents can buy the drug.
Maine Gov. Paul LePage dealt a major blow to the industry in November 2017, when he vetoed a bill that would have regulated and taxed the sale of recreational marijuana. The Portland Press Herald reported that lawmakers are meeting with LePage to propose a new framework.
In 2016, Massachusetts gave residents the green light to carry and use an ounce of marijuana and grow up to 12 plans in their homes. But the future of the state’s legal market is hazy.
Lawmakers delayed the opening of pot shops to July 2018, instead of the January 2018 date that voters approved in the election. Until then, there will be no sales of recreational weed.
Residents and tourists who are 21 and over can buy an ounce of marijuana or one eighth of an ounce of edibles or concentrates in Nevada – while supplies last. Less than two weeks after sales of recreational weed began on July 1, 2017, many stores ran out of marijuana to sell.
The state has earned nearly $US20 million in marijuana tax revenue since the market launched.
There’s bad news if you want to grow your own bud, though. Nevada residents must live 25 miles outside the nearest dispensary in order to be eligible for a grower’s licence.
Oregonians have enjoyed the right to carry an ounce of weed and grow up to four plants at home since 2015. It’s also legal to give edibles as a gift, as long as they’re ingested in private.
Sales have exploded since legalization. In 2017, the state paid out $US85 million in marijuana tax revenue to fund schools, public health initiatives, state police, and local government.
Dispensaries in Washington have raked in over $US1 billion in non-medical marijuana sales since the drug was legalised for recreational use in 2012.
The state allows people to carry up to an ounce of marijuana, but they must require the drug for medicinal purposes in order to be eligible for a grower’s licence. So you can smoke it, but not grow it if you’re toking for fun.
Residents in the nation’s capital voted overwhelmingly to legalise nonmedical marijuana in November 2014.
The bill took effect in 2015, allowing people to possess two ounces or less of marijuana and “gift” up to an ounce, if neither money nor goods or services are exchanged.
PINE VALLEY, Calif. — California legalizes marijuana for recreational use Monday, but that won’t stop federal agents from seizing the drug — even in tiny amounts — on busy freeways and backcountry highways.
Marijuana possession still will be prohibited at eight Border Patrol checkpoints in California, a reminder that state and federal laws collide when it comes to pot. The U.S. government classifies marijuana as a controlled substance, like heroin and LSD.
“Prior to Jan. 1, it’s going to be the same after Jan. 1, because nothing changed on our end,” said Ryan Yamasaki, an assistant chief of the Border Patrol’s San Diego sector. “If you’re a federal law enforcement agency, you uphold federal laws.”
The checkpoints, located up to 100 miles from Mexico, are considered a final line of defense against immigrants who elude agents at the border. They also have been a trap for U.S. citizens carrying drugs, even tiny bags of marijuana.
About 40 percent of pot seizures at Border Patrol checkpoints from fiscal years 2013 to 2016 were an ounce or less from U.S. citizens, according to a Government Accountability Office report last month. California’s new law allows anyone 21 and over to carry up to an ounce.
The Border Patrol operates 34 permanent checkpoints along the Mexican border and an additional 103 “tactical” stops, typically cones and signs that appear for brief periods.
Ronald Vitiello, acting deputy commissioner of parent agency Customs and Border Protection, called drug seizures an “ancillary effect” of enforcing immigration laws. Motorists typically are released after being photographed and fingerprinted. They generally aren’t charged with a crime because prosecutors consider them low priority.
Conflict goes back to 1996
The clash between state and federal marijuana laws played out on a smaller scale near the Canadian border in Washington after that state legalized marijuana in 2014. California is a far busier route for illegal crossings with many more agents.
State and federal marijuana laws have conflicted since California became the first to legalize marijuana for medical use in 1996. Next week, California will be among seven states and Washington, D.C., with legal recreational pot.
U.S. Attorney General Jeff Sessions, a staunch opponent of legalization, said last month that he was taking a close look at federal enforcement, suggesting a tougher stance than President Barack Obama’s administration.
At highway checkpoints, Border Patrol agents look for signs of nervous drivers, like clutching steering wheels and avoiding eye contact and interrupting when passengers are asked to state citizenship. Some panicked drivers make a U-turn when they spot the checkpoint, a dead giveaway.
One recent morning on westbound Interstate 8 about 40 miles east of San Diego, an agent standing outside a booth under a large white canopy stopped drivers for a few seconds to ask their citizenship or waved them through after peering inside.
In about an hour, three raised enough suspicion to be ordered aside for a thorough vehicle search.
A dog discovered a marijuana stash about the size of a thumbprint inside the pickup truck of a man with Arizona license plates who was taking his elderly uncle to a hospital appointment. It would have taken up to an hour to process the arrest, so agents released him after seizing the pot and warning it was illegal.
“I didn’t know that, sorry,” the driver said, walking to his truck after waiting on a bench a few minutes while the dog searched.
The animal sniffed something in another car but found nothing in the seats or trunk. The apologetic driver said she smoked marijuana a week earlier, implying the odor lingered.
Checkpoints create controversy
The Pine Valley checkpoint, amid oak- and chaparral-covered mountains on the main route from Arizona to San Diego, gets busy with drivers returning from weekend getaways but is less traveled than others.
Agents say a checkpoint on Interstate 5 between San Diego and Los Angeles can cause a 4-mile backup in 90 seconds during peak hours.
The government faces pushback over checkpoints. Some residents complain about delays and trespassers trying to circumvent checkpoints — some even dying from heat and exhaustion. Motorists who consider them a privacy invasion steadfastly refuse to answer questions and post their test encounters on YouTube.
Border Patrol officials insist they are effective. Without them, Vitiello said, smugglers would have open passage to cities like Phoenix and Albuquerque, New Mexico, once past the border.
The U.S. Supreme Court ruled in 1976 that agents can question people at checkpoints even without reason to believe anyone in the vehicle is in the country illegally and don’t need a search warrant.
Michael Chernis, an attorney who represents people charged with marijuana crimes, believes checkpoint seizures are a waste of resources but acknowledged the government is empowered.
“The bottom line is, there’s absolutely no protection against federal interaction when it comes to adult use,” he said.
Consumer spending on legal cannabis in North America is outpacing previous estimates, according to a report released this week by Arcview Market Research. The report forecasts that retail cannabis sales will grow 33 percent from 2016 to nearly $10 billion this year.
By 2021, the legal market is expected to reach $24.5 billion. Arcview also revealed that the medical market in California is already as big as the total markets in Colorado, Washington, and Oregon combined. When California begins selling recreational marijuana beginning Jan. 1, that number will skyrocket.
Arcview crunched the numbers provided by BDS Analytics’ GreenEdge point-of-sale tracking service. Tom Adams, Editor-in-Chief at Arcview Market Research and Principal Analyst at BDS Analytics explained, “Our data shows positive indicators across the board for the legal cannabis industry, in North America and around the globe. … The passage of the 2016 ballot initiatives and continued maturation of the existing adult-use markets are the primary drivers of the growth this year. That’s nothing compared to what we can expect in 2018 and beyond from Nevada’s tourism, and California and Canada planning to launch adult-use sales in 2018.”
“Aside from cryptocurrency, there is simply no other industry changing as rapidly or as unevenly as the cannabis sector,” said Troy Dayton, CEO of The Arcview Group. “That makes capturing the data, predicting consumer behavior, and forecasting political developments both extraordinarily difficult and complicated, and one of the most vital tools for investors, entrepreneurs, and regulators trying to make sense of it all.”
Marijuana is becoming legal in California, and entrepreneurs are rushing in with infused artisanal chocolates, specialized farming equipment and security teams to guard large hauls. On Monday, companies will be able to produce and sell marijuana in the state, making it one of eight in the United States where the recreational use of cannabis has been legalized. But finding expertise and financing won’t be easy.
Cannabis use still lacks legal standing with the federal government. That means growers, processors and retailers can’t open accounts or access lines of credit from federally insured banks. They can’t write off business expenses when they file their taxes, and it’s extremely difficult to purchase crop insurance (think of the recent spate of fires).
“It’s federally illegal, and that makes running a cannabis business more challenging than arguably any other kind of business,” said Kris Krane, co-founder of 4Front, a medical marijuana investment and management firm.
Cannabis-focused accelerators and investment companies aim to change that.
These enterprises have long been a presence in Silicon Valley, offering mentoring and investment in exchange for an ownership stake. Companies that provide these types of resources are critical to expanding a nascent industry around legal marijuana, said Krane, if only because they can introduce entrepreneurs to angel investors and other private capital sources.
Funders have reason to be interested. Selling cannabis in California has the potential to generate $5 billion a year, once a critical mass of businesses have proper permits, according to the Agricultural Issues Center at UC Davis. Each harvested acre of cannabis could be worth millions of dollars, based on current prices in Washington, Oregon and Colorado, according to Greg James, the publisher of Marijuana Venture, a monthly business magazine.
Two years ago, Ben Larson and Carter Laren co-founded Gateway, an accelerator in Oakland, that has helped expand 19 cannabis-related startups specializing in a wide variety of business activities, including payment services, cannabis products for seniors, agricultural technology and hemp plastics.
When the pair started, medical marijuana had been legal for two decades, but Gateway found many companies’ business practices were still “not far departed from those of the black market,” Larson said. With legal adult use in sight, the industry is making a rapid transition to more sophisticated, transparent and mainstream business practices, he said.
Gateway now offers $50,000 in exchange for 5 percent of a company’s ownership and brings the management team of startups into its offices for about six months to work with experts, mentors and potential investors. Applicants present their business plans and answer questions on legal issues, trends and the competitive landscape. Larson sometimes assigns homework, asking founders to conduct customer interviews and do market research.
Entrepreneurs bring a wide variety of ideas because the industry is just forming. For example, new apps, sensors and machinery help control growing conditions, save energy and reduce labor costs in greenhouses.
Even “the boring areas” of the marijuana industry offer terrific opportunities, said Larson, because growers are spread too thin. The same company might be cloning plants, harvesting crops, selling to dispensaries and making deliveries. “There may be eight different steps in their value chain that could be specialized” and contracted out, he said.
Increasing brand recognition for products and retailers is another major opportunity for startups. “There’s no Starbucks or Nordstrom’s yet — names that mean things to people,” Larson said.
One of Gateway’s graduates is Carrie Tice, the founder of Octavia Wellness. She quit her job at a technology company in 2015 when her mother became ill and now sells cannabis as tinctures, salves and other products to seniors looking for alternatives to opioids for pain relief and better sleep. Most of her products have little to no THC, the psychoactive component of cannabis.
Gateway helped Tice refine her pitch and introduced her to Big Rock, a private family fund and investment company. Big Rock helps with everything “from community intros and tech support to marketing resources and updates on regulatory developments,” said Tice in an email.
Octavia Wellness now has a network of 80 “wellness consultants” who advise more than 1,100 clients in California, and will be expanding to Nevada, where both medical and recreational marijuana is legal. Tice said that legalizing recreational use will boost her sales considerably because people will no longer have to obtain a doctor’s recommendation to buy her products.
Companies like Big Rock, which has invested more than $10 million in the cannabis industry, are playing an important part in funding the industry’s growth. “Starting up a testing lab or a dispensary is extremely capital intensive,” said Stephen Kaye, Big Rock’s chief operating officer. Private firms can make decisions and move large amounts of money quickly, he said. He receives pitches every day from entrepreneurs and is especially interested in medical research.
For Jody Hall, an entrepreneur in Seattle, joining an investment company has freed her to focus on her core business rather than on the myriad regulations that accompany its operation. Hall, who runs a conventional cupcake business, started a new venture, GoodShip, two years ago to make cannabis edibles. She found that she was spending “way too much time” getting advice from lawyers on what was or wasn’t allowed. Hall recently sold GoodShip to Privateer Holdings, a private equity firm, and is staying on. The cash infusion has given her more time to develop products, she said, and has accelerated her plans to expand to California.
While states are collecting hundreds of millions of dollars in tax revenues from marijuana businesses, and a rising number of Americans favor legalization in some form, Attorney General Jeff Sessions’ firm opposition to it poses a risk to cannabis-related companies. He could “shut the industry down tomorrow,” said Micah Tapman, co-founder of the Canopy cannabis accelerator and venture capital fund in Colorado.
Of course, there are other challenges. Evolving rules and regulations, like new packaging requirements, can add unexpected costs to processors and retailers. Companies forced to deal only in cash can run into safety and theft issues. Many small growers emerging from the black market “have no idea how to run a commercial-scale facility,” James of Marijuana Venture said.
Despite the hurdles and uncertainty facing the industry, Larson of Gateway has remained optimistic. “People are gaining confidence as legalization spreads, and the growth is going to be huge,” he said.
Julie Weed is a New York Times writer.
According to a report by Ameri Research Inc., the global legal cannabis market is forecast to be valued at $63.5 billion by 2024, growing at a CAGR of 21.1% between 2017 to 2024. The market is going through a period of strong growth thanks to increasing legalization and decriminalization of cannabis products across North America and Europe. In the U.S, there are 28 states which have approved the use of cannabis for medical purposes. In major markets like Colorado, California, Alaska, Massachusetts and Nevada cannabis is also legal for recreational use. Earlier this year, the Canadian prime minister has introduced a bill to legalize cannabis for recreational use. The report indicates that the proposed bill mandates the legal age for consumption of cannabis at 18 years, and it provides clarity on the federal and state laws regarding the regulations on cultivation, storage and distribution of cannabis across the country. FinCanna Capital Corp. (CSE: CALI), Cannabis Wheaton Income Corp. (OTC: CBWTF), Liberty Leaf Holdings Ltd. (OTC: LIBFF), Friday Night Inc. (OTC: TGIFF), Future Farm Technologies Inc. (OTC: FFRMF)
The state of California alone is expected to play a significant role in the development of the industry. A report published by New Frontier Data projects that legal cannabis sales in California will reach $2.8 billion in 2017 and $6.6 billion by 2025, with a compound annual growth rate of 12% over the next eight years. Giadha Aguirre de Carcer, New Frontier Data CEO explained, “Significant changes are already underway in California for medical cannabis and adult use laws, which we see will have major implications for the cannabis industry, including ecommerce and delivery services in the state… As the largest state in the country – and the largest potential market for cannabis products – the implications for the growth of the industry because of California’s adult use market cannot be overstated.”
FinCanna Capital Corp. (CSE: CALI) today announced that it will commence trading on the Canadian Securities Exchange under the trading symbol “CALI“. The company announced breaking news that, “FinCanna is supporting the greater medical use of cannabis while benefitting from the growth in the market by investing in top-tier licensed medical cannabis companies in California. In exchange for financing, FinCanna will receive royalties from these licensed medical cannabis and related operations.
To date, FinCanna has completed approximately $14M CDN in financing to support its flagship investment in Cultivation Technologies (“CTI”). Based in Irvine, California, CTI is developing a very significant, state-of-the-art medical cannabis project and has already secured permits to construct a fully-entitled, 111,500 sf. permitted medical cannabis facility on a six-acre property in Coachella, Southern California.
Andriyko Herchak, CEO & Director, states, “We are very excited to apart of the growing industry of medicinal cannabis and our public listing offers investors increasing access to growing cannabis operations in the United States, particularly California. While the legalization of recreational Cannabis is highly anticipated in California, we remain focused on our core competency of sourcing and financing ethical, medicinal and regulated cannabis businesses to leverage the paradigm shift in the industry.”
FinCanna is initially focused on California since it is the sixth largest economy in the world and the largest medical cannabis market in North America. Analysts estimate the State’s legal cannabis industry will grow at a 21.1% CAGR to $6.5 billion by 2020, and generate upwards of $1 billion in tax revenue. New laws that come into effect in January 2018 are expected to significantly change existing supply and demand dynamics.”
Cannabis Wheaton Income Corp. (OTCQB: CBWTF) is the first cannabis streaming company in the world. Earlier this year, the company announced that it has entered an exclusive distribution alliance with the corporate owner of a national chain of independent pharmacies to develop and implement medical cannabis distribution and retail sale opportunities at all Pharmacy Group locations. Hugo Alves, President of Cannabis Wheaton stated, “We have been closely monitoring how the distribution of cannabis will play out in each of the individual provinces in Canada and how those provincial distribution systems may impact our streaming partners and our production yield allocations. Our goal is to ensure that Cannabis Wheaton and its streaming partners have opportunities to participate in distribution channels which allow them to maintain contact with customers and capture a portion of the retail margin from sales to those customers.”
Liberty Leaf Holdings Ltd. (OTCQB: LIBFF) is a new Canadian-based, public company whose focus is to build and support a diversified portfolio of cannabis-sector businesses, including cultivation, processing, value-added CBD/THC pet products, and supply-chain products within this dynamic and fast-growing sector. On December 7, 2017, the company announced it has acquired a majority interest in Just Kush Enterprises, a company in the final stages of obtaining an Access to Cannabis for Medical Purposes Regulations (ACMPR) licence. As well, Just Kush owns complete control over a current Medical Marijuana Access Regulations (MMAR)-licensed production facility.
Friday Night Inc. (OTCQB: TGIFF) is a Canadian public company, which owns and controls cannabis and hemp based assets in Las Vegas Nevada. The company owns 91% of Alternative Medicine Association, LC (AMA), a licensed medical and adult-use cannabis cultivation and production facility that produces its own line of unique cannabis-based products and manufactures other third-party brands. Infused MFG, also a 91% owned subsidiary, produces hemp-based, CBD products, thoughtfully crafted of high quality organic botanical ingredients. FridayNight Inc. is focused on strengthening and expanding these operations within and outside of the state. Recently, the company and Body & Mind Inc. announced an all-stock acquisition valuing BAM at approximately CAD $115,000,000 based on the recent closing price of Friday Night.
Future Farm Technologies Inc. (OTCQB: FFRMF) is a Canadian company with projects throughout North America including California, Florida and Maryland. The Company’s business model includes developing and acquiring technologies that will position it as a leader in the evolution of Controlled Environment Agriculture (CEA) for the global production of various types of plants, with a focus on cannabis. On December 21, 2017, the company announced it has signed a lease agreement for 100-acres in Maine, thereby doubling its previously announced purchase of 120-acres of a licensed industrial hemp farm. As part of the lease agreement, the Company has an option to lease up to an additional 1,000-acres from the Landlord. The Company also announces that it is preparing to set up a hemp cloning operation, which will use vertical farming technology pioneered by the Company to supply over 200,000 clones to the farm in 2018.
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For Immediate Release
Chicago, IL – Dec 29, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Innovative Industrial Properties Inc IIPR , Constellation Brands, Inc. STZ , Boston Beer Company Inc SAM , British American Tobacco PLC BTI and Las Vegas Sands Corp. LVS .
Today, Zacks is promoting its ”Buy” stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Thursday’s Analyst Blog:
5 Best “Sinfully Good” Stocks to Buy Ahead of 2018
Does morality matter to you? If yes, then you may abhor the idea of putting money into “sin stocks” that are into activities considered unethical. However, products or services in this space are relatively inelastic, and business is recession-proof. The very nature of their business ensures a steady stream of consumers irrespective of market conditions, which eventually lead to higher margins and solid profits.
And why not? While legalization of both recreational and medical marijuana will propel the pot industry to new highs, reduction in taxes will help alcohol producers save more. The cigarette industry, meanwhile, continues to make headway despite legal restrictions. As far as the gaming industry is concerned, growth in the Macau market and Japan opening to casinos will surely boost their bottom line heading into the New Year.
But before we zero in on stocks from this tempting space, let’s take a look at what’s in store for these companies.
Cannabis Sales Up This Year, With More Room to Expand
Per Marijuana Business Daily’s annual report, legal pot sales have skyrocketed 30% so far this year, which is equivalent to $5.1-$6.1 billion in total revenues. In fact, sales are expected to reach $6.7-$8.8 billion in the coming year, which will result in a whopping gain of at least 31%. Further, sales could top $17 billion by 2021.
Such a stellar growth is possible, as a number of U.S. states have voted to legalize recreational pot. Legalization of recreational weed in the state of California is helping Cannabis stocks move north. California’s weed market is expected to open in January, with weeds costing around $500 a pound.
Lest we forget, as of now, 29 states and the District of Columbia have already legalized the usage of medical marijuana. An increasing number of people are appreciating the medical value of marijuana as they believe it is safer compared to alcohol and a few other legal prescription drugs. Thus, medical marijuana industries in Illinois, Nevada and New York are poised to make the most as the pot market matures.
Alcohol Producers See Reduced Taxes, Cigarette Industry Fights Regulations
Recently, jubilant Republicans delivered a tax bill to President Donald Trump before Christmas, as promised. The Republican tax plan got the final approval by the House that gave Corporate America a massive permanent tax break. The tax bill also has a provision that will give alcohol producers a two-year reduction in federal excise tax worth $4.2 billion. Reduction in such taxes will encompass brewers, distilleries and wineries.
Kevin McElroy, the lead brewer at Random Row Brewing company, said, “I think it’s great,” as the company will save $3.50 per barrel of beer from the tax break. He added that the new provision will save them $1,500 to $2,000 next year.
However, the same cannot be said of the U.S. tobacco industry. Cigarette sales have fallen considerably in the U.S. as the industry witnessed an increase in federal excise tax. The industry also faces stiff regulations and restrictions. Nevertheless, despite cigarette sales tanking, sales of flavored cigars continue to gain traction. Menthol cigarettes, meanwhile, continue to hold a constant market share. Smart marketing and advertising moves played a major role in helping the cigarette industry stay afloat.
Gambling Stocks Make Attractive Buys – Macau is the Key
The year 2017 has been superb for gaming stocks, with Wynn Resorts and Melco Resorts comfortably outperforming the broader market. The climb in casino stocks was mostly due to the uptick in Macau’s gambling market. In the first 11 months of this year, revenues surged 19.5%. Macau’s momentum has also been hitting highs lately, giving investors enough reason to be bullish going into next year.
That said, the big expansion for casino companies in 2018 will be in Japan. The country is expected to approve two more gaming licenses next year, while estimates are that Japan’s market could be worth $40 billion. Major casino players have made Japan their top priority for next year with an outlay of around $10 billion in building a single resort. This property from Las Vegas Sands will eventually become the biggest license opening since Singapore, a key market for owners of integrated resorts.
Top 5 Sin Stocks to Buy for 2018
As mentioned above, sinful stocks are well poised to gain traction in next year. Such stocks not only celebrate good times but are also useful during recessionary periods. We have selected five solid stocks from the pot, alcohol, tobacco and gaming industries. These stocks flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Innovative Industrial Properties Inc is focused on the acquisition, ownership and management of specialized industrial properties leased to state-licensed operators for their regulated medical-use cannabis facilities. The company has a Zacks Rank# 2 (Buy). The stock has given a stellar return of 53.9% so far this year and is poised to continue its winning run in 2018.
(Looking for the Best Stocks for 2018? Be among the first to see our Top Ten Stocks for 2018 portfolio here. )
Constellation Brands, Inc. together with its subsidiaries, produces, imports, and markets beer, wine, and spirits in the United States. The company has a Zacks Rank# 2. Constellation Brands has given an attractive return of 47.4% so far this year. The expected earnings growth for 2018 is 11.2%.
Boston Beer Company Inc is a craft brewer in the United States. The company is engaged in the business of producing and selling alcohol beverages primarily in the domestic market and in selected international markets. The company has a Zacks Rank# 1 (Strong Buy). The stock has given a promising return of 14.6% so far this year. For 2018, the expected earnings growth is 1.3%.
British American Tobacco PLC is the holding company of a group of companies which manufacture, market and sell tobacco products. The company has a Zacks Rank# 2. The stock has given an encouraging return of 18.9% so far this year and is posed to grow in 2018.
Las Vegas Sands Corp. is a hotel, gaming, and retail mall company headquartered in Las Vegas, Nevada. The company has a Zacks Rank# 2. The stock has given a superb return of 32.6% so far this year. The expected earnings growth for 2018 is 3.8%.
Today’s Stocks from Zacks’ Hottest Strategies
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Motley Fool is out this week with another report scaring investors away from Canada’s burgeoning cannabis market. Despite the immense growth of the industry in the lead up to next summer’s legalization efforts across the country, the finance rag reports that Canadian number crunchers Statistics Canada have pulled the curtain back from the wizard, showing that the cannabis industry is far smaller than previously thought.
According to the report, Canada’s black market for cannabis was worth an estimated $6.2 billion in 2015, although the article freely admits the difficulties in nailing down exact numbers in the underground drug trade. In comparison, The Motley Fool asserts, the wine industry is worth an estimated $7 billion, with no real industry giants listed on the TSX.
Looking back to cannabis, Canopy Growth (TSX:WEED) has a market cap of $4.4 billion, and Aurora Cannabis (TSX:ACB) has a market cap of $3.2 billion. With those two companies combined valued more than the entire industry as a whole, The Motley Fool argues that clearly the sector is overvalued, with no room for market growth.
The report comes on the heels of investment advisor Edwards Jones’ awkward analysis of the industry earlier this week, in which the company called cannabis overhyped with “little barrier to entry.” In what was perhaps the most misguided advice of the year, the Edward Jones report recommended that investors interested in cannabis invest in companies that have nothing to do with marijuana.
Earlier this month Forbes printed a similar story. That report quotes analytics firm GT Research, who says that in 2018 Canadians are expected to consume around 474 metric tons of cannabis. The number contrasts other reports with higher figures of approximately 600 to 900 metric tons.
In an interview with Forbes, experts from GT Research argue that the discrepancy in numbers comes from misleading views on what makes a marijuana smoker.
“One thing you often hear about the cannabis market is that people will adopt cannabis en masse, around 17% if you believe the surveys,” said Damitha Pathmalal, Director of Research for GT Research to Forbes. “Then they go on to assume just because someone tries it, they’ll become a lifelong user… That’s not really the case.”
In November The Motley Fool began throwing the “B” word around when talking about the cannabis industry – Bubble. According to a report, cannabis valuations are growing at a rapid pace, in some cases doubling, without ever turning a profit. The industry is speculative, according to the article, and investors would be wise to hold back.
As an example, the article looks at Shopify Inc. (TSX:SHOP)(NYSE:SHOP), who, after a report questioning the company’s business model, saw share prices drop 20 percent.
“Stocks that are based on hype can be very sensitive to news, and if tomorrow we find out that marijuana legalization is delayed indefinitely, then we would likely see cannabis stocks come crashing down. The industry is riding high today, but there’s no guarantee that it will be able to continue that way,” the article in The Motley Fool stated.
And if cell phones are banned tomorrow, Apple’s stock would come crashing down as well…
Recently, Nevada published revenue statistics from the first few months of legal cannabis sales in the state. The combined recreational and medical marijuana markets outpaced projections just months after legalization went into effect. In October alone, cannabis sales reached $37 million and brought the state $5.8 million in tax revenue.
“We are pretty on target with projections, maybe a little over,” Nevada Department of Taxation spokeswoman Stephanie Klapstein told The Las Vegas Review-Journal.
The Motley Fool article argues that cannabis offers no room for growth. “The assumption for investors is that legalizing marijuana will create new demand and build on existing users. However, I’m skeptical that this will be the case. I’ve never smoked pot in my life and I can’t image I ever will regardless of whether it is legal or not,” the author writes.
Meanwhile, newly legalized states like Nevada are calling for special sessions of the state legislature because they have so much tax revenue they just do not know what to do with it.
For some reason, the old guard investor class seems bent on scaring investors off of the industry. Is it a risk? For sure.
But is it a risk worth taking? Just take a look at what is happening on the ground right now.
Mild temperatures and a three-day weekend could lead to a larger than average crowd at Stateline on Sunday, Dec. 31.
Traditionally, thousands of people ring in the New Year in the Tahoe casino core.
But recent years have seen a reduced crowd, thanks in part to the annual Snow Globe celebration at South Lake Tahoe, which lasts until 1:30 a.m. Jan. 1.
The music festival kicks off 2 p.m. today at Lake Tahoe Community College’s play field and runs for three days.
The Douglas County Sheriff’s Office is preparing for a busy New Year’s Eve celebration at Lake Tahoe on Sunday.
Undersheriff Paul Howell said the casinos are more security conscious in light of the Oct. 1 mass shooting in Las Vegas.
“We have discussed it with them and there certainly is a heightened sense of awareness toward a potential threat from outside their particular venue,” he said. “Our ops plan does include elevated observation points with snipers, as we have always done.”
The large number of celebrants in Stateline on New Year’s Eve will attract a proportionately large number of law enforcement officers to keep the peace.
Douglas County Sheriff’s deputies will be present in the Stateline casino core throughout the evening, supplemented by officers and representatives of numerous other law enforcement agencies, including Nevada Highway Patrol, Nevada Department of Corrections, South Lake Tahoe Police Department, El Dorado County Sheriff’s Office, California Highway Patrol, and the FBI. Supporting agencies include the Douglas County Sheriff’s Search and Rescue, Douglas County Communications Center, Tahoe-Douglas Fire Department, Cal-Trans and Nevada Department of Transportation
Highway 50 through the casino core may end up closing with vehicle traffic diverted around it for public safety, according to the sheriff’s office. Traffic would be detoured onto upper and lower Lake Parkway Drive.
Sheriff Ron Pierini implemented a nonconfrontational approach to dealing with revelers, which has been successful in reducing the number of incidents.
“The goal of the Sheriff’s Office is protecting life and property while at the same time allowing celebrants to enthusiastically ring in the New Year,” according to authorities. “There are, however, behaviors that will not be tolerated by law enforcement.”
Anyone placing revelers or law enforcement officers in danger could find themselves in custody. Deputies won’t tolerate acts of rowdy behavior, fighting, throwing projectiles, vandalism, theft, narcotic violations, severe public drunkenness, possession of or discharge of fireworks, minors consuming or possessing alcohol, or any other act that disrupts the goal of achieving a peaceful and safe environment for all in attendance.
Douglas County code prohibits glass or metal containers, regardless of contents in the casino core area on New Year’s Eve. Bottles and cans, including their contents, will be confiscated for destruction by law enforcement. Alcohol or other liquids shall be in a plastic cup, paper cup or other similar vessel. Area casinos are aware of this requirement, and will serve alcoholic beverages in plastic cups throughout the evening.
The Sheriff’s Office asks parents to keep track of their children during the New Year’s Eve celebration, saying the event is not intended for juveniles.
Each year during the event, a large percentage of contacts and arrests are made of persons under the age of 21. Anyone under the age of 18 is subject to curfew, which is midnight Sunday.
The legal drinking age in Nevada is 21, which means anyone younger could be cited. While recreational marijuana is legal for those 21 years and older in Nevada, its public consumption is not.
Driving under the influence of alcohol or drugs is also illegal.
Not all of Douglas County’s law enforcement resources will be devoted to Stateline.
The sheriff’s office and the Nevada Highway Patrol will be fully staffed and on the lookout for impaired drivers.
Anyone who consumes alcohol while celebrating New Year’s Eve is urged to have a sober driver or call a taxi.
Last year, Highway 50 was closed for about a half-hour starting at 11:45 p.m. Between Stateline and Carson Valley there were 26 arrests, with five for driving under the influence, including one where someone was injured.
According to the National Weather Service, the temperature at midnight in Stateline is forecast to be 36 degrees.
It was the best of times; it was the worst of times. Tens of thousands die of drug overdoses, hundreds of thousands get arrested for drugs, yet marijuana is seeing boom times. As we bid adieu to 2017, here are the year’s drug policy highlights:
Drug overdoses killed record numbers of Americans in 2017. (Wikimedia)
1.The Opioid Crisis Deepens, With Overdose Deaths at an All-Time High
The country’s opioid crisis showed no signs of abating in 2017, with the Centers for Disease Control estimating 66,000 overdose deaths this year, up from 63,000 in 2016. To be clear, only about two-thirds of fatal drug overdoses are linked to heroin and prescription opioids, but opioid overdoses surged in 2016 by 28%. It’s too early for final data on 2017 overdoses, but there is little reason to doubt that opioids were driving the increase this year. The high levels of overdose deaths have led to a fall in US life expectancy for the past two years, only the third time that has happened in the past century. Policy efforts to curtail the problem have sometimes included regressive moves to up drug sentences, and have generally given only limited consideration to the needs many patients have to access these substances. But public health measures like naloxone distribution and “Good Samaritan” non-prosecution policies have also advanced.
2. Fentanyl is Killing More and More People
The powerful synthetic opioid fentanyl and its analogs are implicated in an increasingly large number of opioid overdose deaths. While deaths involving prescription opioids are decreasing, fentanyl-related deaths have increased by an average of 88% a year since 2013. Illicitly imported fentanyl from labs in China or Mexico is mixed with heroin with lethal results: Half of the increase in heroin-related overdose deaths is attributable to heroin cut with fentanyl, the CDC reported in September. There were nearly 20,000 deaths attributable to fentanyl and other illicit opioids in 2016; the 2017 numbers are likely to be even worse.
3. Key Federal Drug Policy Positions Remain Unfilled, and Kellyanne is In Charge
The Trump administration has not nominated anyone to head the DEA, and the agency is currently being led by Acting Administrator Robert Patterson after Chuck Rosenberg, the acting administrator when Trump took office, resigned in September, saying he didn’t want to work with the administration any longer. Similarly, the White House Office of National Drug Control Policy (ONDCP — the drug czar’s office) is without a permanent head after Trump’s nominee, Pennsylvania GOP Rep. Tom Marino went down in flames in October in the wake of reports he steered a bill through Congress that impeded the DEA from going after pharmaceutical drug distributors. Neither the White House nor anyone else seems very interested in filling the position, in part, perhaps, because earlier in the year, Trump floated the notion of cutting ONDCP’s budget by nearly 95%. But not to worry: Trump pollster, counselor, and apologist Kellyanne Conway is now leading the administration’s fight against opioids — even though she has no public health experience whatsoever.
So far, Attorney General Sessions’ bark is worse than his bite when it comes to marijuana policy. (senate.gov)
4. Attorney General Sessions Revives the Federal War on Drugs…
Under President Obama, Attorney General Eric Holder presided over a ratcheting down of harsh federal drug prosecutions and sentences, but current Attorney General Jeff Sessions is doing his best to undo those reforms. In May, Sessions announced that he had directed federal prosecutors to seek the most severe penalties possible in drug cases, including mandatory minimum sentences.
5. …But Fails to Implement a War on Weed, So Far
For all the wailing, gnashing of teeth, and dire predictions of a Sessions war on weed, it hasn’t happened yet. The attorney general has made no secret of his dislike for the demon weed, but that has yet to translate into any firm policy positions or federal crackdowns on marijuana in states where it is legal, for either medical or recreational use. Congressional action continues to bar the use of Justice Department funds to go after medical marijuana, although the future of that law after January 22nd remains in doubt. But there was no bar on going after state-legal recreational marijuana, yet it didn’t happen. Sessions told the House Judiciary Committee in November that the Obama-era Cole memo remains in effect. That memo directs prosecutors to pretty much leave state-legal marijuana alone except for specified concerns, such as the involvement of youth, violence, or diversion. Later in November, Sessions said the Justice Department was still examining the Cole memo, so all is not safe, but today legal marijuana is still standing.
6. Legal Marijuana’s $10 Billion Dollar Year
In December, marijuana market watchers Arcview Market Research estimated that retail marijuana sales would hit $10 billion in 2017, up 33% over 2016. But that’s just the beginning, Arcview said. With huge recreational markets such as California (pop. 39 million) and Canada (pop. 36 million) coming online next year, the group expects North American sales to top $24.5 billion by 2021. It’s hard even for a pot-hating attorney general to get in front of that economic juggernaut.
7. Pot is More Popular than Ever
Just ask Gallup. The venerable polling firm has been tracking support for marijuana legalization since 1969, when it was at just 12%. In its latest poll, from October, Gallup now has support for marijuana legalization at 64%. What is really impressive is the rapid increase in support in the past 20 years: In 1996, support was at 25%; by 2012, it had doubled to 50%; and it’s gained another 14 points in the five years since. Other pollsters are reporting similar current levels of support for marijuana legalization. And this could be another reason the attorney general hesitates to crack down on weed.
8. No State Legalized Weed, But 2018 Should Be Different
After 2016 saw marijuana legalization initiatives win in California, Maine, Massachusetts, and Nevada — losing only in Arizona, closely — anticipation was high that 2017 would see more states come aboard. It didn’t happen. There are two explanations for this: First, it was an off-off election year and no initiatives were on the ballot, and second, it’s hard to move controversial legislation though the state house. Still, the Vermont legislature actually passed a legalization bill, only to see it vetoed by a Republican governor, and that governor now says he is ready to sign a legalization bill. That could happen as early as next month. Likewise, a number of other states saw legalization bills make serious progress, and we could see those efforts come to fruition in places like Connecticut, Delaware, New Jersey, and Rhode Island. And 2018 will most likely see at least one legalization initiative. Activists in Michigan have already handed in signatures and should have enough of a cushion to qualify for the ballot.
9. Safe Injection Sites in the US Draw Ever Nearer
The harm reduction intervention has been proven to save lives, increase public health and public safety, and get hardcore drug users in touch with medical and social service help, and the message is finally on the verge of getting though in the US. At least two major West Coast cities, San Francisco and Seattle, are advancing plans to open such facilities — although not without staunch opposition — and, under the progressive leadership of young Mayor Svante Myrick, Ithaca, New York, is making similar plans.
10. The War on Drugs Rolls On
Despite the legalization of medical and/or recreational marijuana in various states, despite various sentencing reforms at the state and federal level, despite the growing recognition that “we can’t arrest our way out of this problem,” the drug war just keeps on going. The FBI released its annual Uniform Crime Report in November, and while the numbers are from 2016, this year’s numbers are unlikely to be any better. More than 600,000 people got arrested for marijuana offenses in 2016, down from a peak of nearly 800,000 in 2007, but still up by 75,000 or 12% over 2015. It’s the same story with overall drug arrests: While total drug arrest numbers peaked at just under 1.9 million a year in 2006 and 2007 — just ahead of the peak in prison population — and had been trending downward ever since, they bumped up again last year to 1.57 million, a 5.6% increase over 2015.