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

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Tuesday, November 5

Updates related to the U.S. presidential election will remain on TSX investors’ radar today as the third-quarter corporate earnings season…

Read more »

think thought consider
Tech Stocks

Is CGI Stock a Buy Even With No Dividend Yield?

CGI stock may not have a dividend to speak of. But does that necessarily mean you should ignore this top…

Read more »

A robotic hand interacting with a visual AI touchscreen display.
Tech Stocks

Why Now Is the Time to Invest in Canadian AI Stocks

Are you looking for one of the most solid Canadian AI stocks out there? This one is probably your best…

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

Why AI Stocks Should Be in Every Canadian Investor’s Portfolio

AI stocks continue to be one of the best options out there for long-term investing, especially when considering Canadian options.

Read more »

stock research, analyze data
Bank Stocks

Canadian Bank Stocks: Buy, Sell, or Hold?

There are opportunities and risks on the horizon for the Canadian banks.

Read more »

Young Boy with Jet Pack Dreams of Flying
Stock Market

Is Air Canada Stock a Good Buy After Its Q3 Results

Down almost 60% from all-time highs, Air Canada is an undervalued TSX stock that remains an enticing investment in November…

Read more »

cloud computing
Investing

Where to Invest $10,000 in November

Given their solid underlying businesses and healthy growth prospects, I expect these two defensive stocks to outperform uncertain outlook.

Read more »

coins jump into piggy bank
Retirement

Here’s the Average RRSP Balance at Age 44 for Canadians

Holding stocks like Alimentation Couche-Tard (TSX:ATD) in an RRSP is a good way to build your wealth.

Read more »