The investing parallels of alcohol and marijuana

The decision by Canada to legalise marijuana nationwide on its national day, July 1, puts more pressure on US authorities to remove the national prohibition. (Reuters photo)

Imagine for a moment that you could go back in time to 1932, the year before the 21st Amendment to the US Constitution was ratified, repealing Prohibition (and the 18th Amendment). What might you do with the knowledge that the production, transport and sale of alcoholic beverages was about to be legalised? What sort of investment opportunities might you find? How would you deploy your capital?

Fast-forward to 2017. Might we be in a similar, if not exactly parallel, situation regarding a different investment opportunity?

It's a question I have been thinking about since the announcement that Canada will consider legislation to legalise marijuana for recreational use. According to Bloomberg News, Canada is advancing plans to become the first Group of Seven nation to legalise recreational marijuana nationally. But Prime Minister Justin Trudeau is keeping key details hazy and allowing arrests to continue while parliament debates his plan.

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