Making the Case for Cannabis as an Ethical Investment

Why ethical investors should consider buying shares of Canopy Growth Corp. (TSX:WEED) and other cannabis stocks.

| More on:

Cannabis stocks are all the rage this year with companies like Canopy Growth Corp. (TSX:WEED) and MedReleaf Corp. (TSX:LEAF) giving investors terrific returns and being surrounded by tremendous hype, as the industry expects enormous growth once pot becomes legalized next year. The high-growth industry certainly offers terrific prospects that would be envied by many tech stocks. However, a big hurdle for some investors is investing in “sin stocks,” or what could be perceived as unethical industries and businesses.

It’s for this reason that I am going to make a case for why it would be ethical to invest in pot stocks.

Regulated companies will keep marijuana out of the hands of minors

Multiple provinces have come out with some sort of proposed framework for how cannabis will be regulated in their part of the country, and so far the consensus has seen a minimum age of at least 18 to consume cannabis. Many users of marijuana started smoking in their teen years in high school, and some started even prior to that. If cannabis companies are successful, and pot is obtained through regulated dealers, then that can help prevent pot from being used by children.

By having kids to wait until adulthood to make the decision of whether to smoke pot or not, it will allow users to be more informed of the risks and benefits.

Licensed producers will make the product safer

When users buy drugs off the street, there is a danger that pot could be laced with fentanyl and other substances that could put people at risk of overdose and death that normally wouldn’t happen with regular pot. A corporation that is growing and selling marijuana would have much more of an incentive both financially and legally to make sure its products are safe, as opposed to pot that is sold by an illegal dealer off the street.

Minimizing or eliminating the black market could keep money away from criminal organizations

There’s a lot of money in pot, and you can be certain that pot sales to the underground are helping to fund criminals and gang activity. The more money that flows into a regulated pot market means less money for criminals and could lead to potentially safer streets.

The counterargument

Although legalization may have the above benefits, that does not take away from the potential risks involved with consuming the drug or the potential health issues that may come as a result of it. Like tobacco and alcohol, marijuana can cause harm to an individual as well as to others. However, one needs to look no further than the prohibition era to see why trying to prevent pot usage completely might be a wasted effort.

I’m not advocating that pot is a safe or healthy drug, but that by being produced and sold from a company like Canopy Growth or MedReleaf will ensure a safer alternative than what would be available through the underground. Tobacco and alcohol companies are publicly traded, and it would be difficult to argue that cannabis is a more harmful drug than either of those.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor David Jagielski has no position in any stocks mentioned. 

More on Investing

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

Emerging Canadian AI Companies With Big Potential

These tech stocks are paving the way to an AI-filled future, but still offer enough growth ahead for a strong…

Read more »

Young Boy with Jet Pack Dreams of Flying
Tech Stocks

Is Constellation Software Stock a Buy, Sell, or Hold for 2025?

CSU stock has long been a strong option for high growth, high value stocks. But are there now too many…

Read more »

rising arrow with flames
Investing

2 Riskier Stocks With High Potential for Canadian Investors in November

Risky stocks such as Well Health Technologies have the potential to provide life-changing long-term returns.

Read more »

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »

Canada day banner background design of flag
Investing

Got $500? 5 Top Canadian Stocks to Buy and Hold

These top Canadian stocks have solid fundamentals with potential to outperform the benchmark index by a wide margin.

Read more »

man touches brain to show a good idea
Energy Stocks

1 No-Brainer Energy Stock to Buy With $500 Right Now

Should you buy a cyclical energy stock at its decade-high? Probably not. But read this before you make a decision.

Read more »

Asset Management
Stocks for Beginners

TFSA: 4 Canadian Stocks to Buy and Hold Forever

Thinking about what to buy with the new TFSA contribution space in 2025? These four Canadian stocks are worth holding…

Read more »