Dear Mr. Berko: Three other people and I own a small company. We’ve been in business together for 14 years. We have a large 401(k) plan in which we equally share, and I’ve been managing it since we took it over from an adviser in 2011. And it has done very well since. I decided to invest $60,000 in several marijuana-related stocks and told my partners. They strongly objected, saying it was too risky because marijuana is illegal and there’s a negative social stigma attached to it. It’s caused friction because I’d never been questioned on portfolio selections before. Do you have any comments or thoughts before I look for an alternative investment? And please tell me about some good pot-related stocks, in case I decide to personally own some. Why won’t Congress legalize pot?
— PC, Detroit
Dear PC: Wouldn’t it be nice if all of you could just get a bong?
Howbeit, I understand how your partners feel. And after 14 years of working together and building a successful business, it’s not worth risking a falling-out. Still, the marijuana movement has been unstoppable. Canada recently became the second country to legalize possession and recreational use. The U.S. has also witnessed a steady progression toward legality, and it’s estimated that federal approval would generate $100 billion in tax revenue by 2022 and create more than 1 million jobs. So far, 10 states and the District of Columbia have approved the recreational use of marijuana, and most allow pot to be used for medicinal purposes, even though the feds still classify it as an illegal Schedule I drug. A recent Gallup Poll survey found that 64 percent of Americans approve of the legalization of recreational marijuana, and 94 percent say it should be used medicinally. But be wise. Forget about stocking pot in your 401(k).
The most consequential reason Congress won’t legalize pot is money. Sundry federal agencies would be forced to dismiss a large number of wage earners employed to arrest and detain pot users, suppliers and growers. Furthermore, courts across the nation are overloaded with pot cases, which consume an average of 50 percent of criminal courts’ daily proceedings. Legalizing pot would force many lawyers, judges and court employees to stand in unemployment lines and look for productive jobs. It would also reduce our prison population by at least 30 percent. Imagine how that would impact the thousands of small businesses across the nation whose revenues from food, toiletries, office supplies, tobacco, etc., are sustained by local prisons. Then imagine how many prison employees, most with zero skills, would lose their paychecks. And legalizing pot would also reduce the ranks of most local police forces. Pot is a hugely profitable enterprise for law enforcement, and enforcing anti-pot laws hurts the earnings of too many families for Congress to make it illegal.
