Prohibition was meant to be a magical law that solved all our problems.
It would end crime and corruption, reduce the tax burden created by prisons and poorhouses, and improve the general health and mental wellbeing of the American people.
If it actually did those things, America might be a very different country today.
Instead, it made people go bat$#&% insane.
There was some sound economic theory behind the law. But it failed to take into account basic human nature. (The Oxford English Dictionary defines human nature as “the need to get blasted twice a week just to feel normal”.)
Crime not only increased, it became organised. Smuggling syndicates supplied liquor to underground speakeasies. Crime bosses like Al Capone made millions off skyrocketing demand for black market liquor. (And the vocation of “criminal accountant” was born.)
By the time Prohibition ended, nearly 10,000 people died from drinking spike alcohol. And the prisons were overflowing with folks who had broken the very prohibition laws that were supposed to clear them.
The brewing industry was devastated by Prohibition. But there were a few companies who managed to keep their doors open by pivoting to other, more legal business opportunities.
Pabst Brewing Company dropped “Brewing” and started producing a processed cheese spread called Pabst-ett.
Yuengling got by on some non-alcoholic beer substitutes and ice cream.
Jim Beam sold its bourbon as medicinal liquor.
Coors Brewing Company got into the toilet game and rebranded as the Coors Porcelain Company.
Anheuser-Busch InBev played the loophole game by selling the raw ingredients for beer. (If its customers happened to go home and turn those raw ingredients into beer that was none of InBev’s business.)
Notice something about all the companies I mentioned?
They all went on to become the biggest names in the brewing business. That’s because they managed to keep their doors open during Prohibition with tricks and loopholes.
When the law lifted, new brewers had to rush to build their businesses from the ground up. But these companies were ready to go.
They had the equipment. The experience. The channels of distribution.
They came out of the gate like a rocket. Which gave them the momentum to go on to dominate the market years later.
Would you believe me if I told you we are in a similar position right now? There’s a prohibition in place in the U.S. that’s about to be lifted. And there are a choice few companies ready to rocket out of the gate.
The Winners of the 21st Century Prohibition
Some folks might not be willing to admit it, but we are in a state of prohibition right now.
And it’s about to come to an end any day now. And there are folks ready and waiting, positioned for blast off just like those breweries who sold toilets.
You’ve probably guessed by now (I haven’t been super subtle), that I’m talking about Marijuana Prohibition.
Whether you like it or not, the fact is: marijuana legalisation is coming to the United States.
I can’t tell you the exact date that it’s going to happen. But I can say that anticipation is huge this year. And anticipation drives stocks higher.
Currently, over 60% of states have legalised marijuana in some form. Canada has legalised marijuana nationwide. And according to polls, 66% of Americans are in favor of recreational legalisation — including a majority of Republicans and older voters.
Ninety-four percent of people are in favour of legalisation for medical use in the United States. When was the last time that many people agreed on anything in the United States?
I’ll tell you when.
1933. When the American people stood up and said with one voice, “WE LIKE BEER.”
Making it happen
We’ve seen a drastic increase in voter support over the past several years, and both Republicans and Democrats are on board.
There’s legislation in Congress right now with bipartisan support that’s set to change everything for the marijuana industry in 2019. If this legislation passes, it will be 100% up to the states to decide on their own marijuana laws.
Right now, the fact that marijuana is still illegal on the federal level is a huge problem for marijuana companies. (Try opening a bank account for a federally-prohibited business.)
But when this legislation passes, that will no longer be an issue. And the companies that are ready to go are positioned to dominate the market.