Big and Small Tobacco Set to Profit From Emerging Legal Marijuana Trade
Look to small-cap tobacco companies such as Vector Group (NYSE: VGR) to hop on the train as well as larger companies like Altria Group Inc. (NYSE: MO) and Reynolds American (NYSE: RAI).
Last fall Washington State and Colorado became the first states in the union to legalize the recreational use of marijuana. Both states are now tasked with the job of figuring out just how they are going to sell the drug over the counter. Concerns are wide reaching. Officials are debating on how the product is to be grown, tested and labeled, as well as what regulations will apply. Adults over 21 will be able to walk into certain stores in both states and purchase up to an ounce of heavily taxed weed. Sales are slated to begin in Washington at the end of the year. Clearly the nation is watching closely to see what type of model these states put in place to ensure everything associated with the new venture is structured properly and safe for potential users. It's unclear as of now whether #$%$ growers will be tapped as vendors but it seems likely. Over 18 states condone the use of marijuana for illnesses such as cancer and HIV/AIDS and the number of states that will pass recreational use of the drug is expected to grow by at least 11 this year.