Sin industries like marijuana and sports betting could shine in 2019
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Aïda Amer/Axios
Don't bet against sin industries like marijuana and sports betting in 2019, even if the broader economy and markets stumble.
The bottom line: Industries usually develop organically, including all the layers of infrastructure and logistics. These won't. Instead, they're being born into adulthood by rapidly-expanding legalization.
- As a sign of high times, former Speaker John Boehner and former Massachusetts governor Bill Weld this year joined the board of a cannabis company, Acreage Holdings. Boehner invoked the need for veterans to access the drug legally.
- And the farm bill signed this month legalizes hemp at the federal level.
- Be smart: Lots of these companies will fail. But there will be some analysts who can't see the growth for the growing pains.
The legal marijuana industry had a banner year in 2018, as the global market exploded and cannabis pushed its way into the financial and cultural mainstream, Gillian Flaccus ("a member of the AP's marijuana beat team") writes:
- "Liberal California became the largest legal U.S. marketplace, conservative Utah and Oklahoma embraced medical marijuana, and the U.S. East Coast got its first commercial pot shops" in Massachusetts in November.
- "Canada ushered in broad legalization, and Mexico's Supreme Court set the stage for that country to follow."
- "U.S. drug regulators approved the first marijuana-based pharmaceutical to treat kids with a form of epilepsy, and billions of investment dollars poured into cannabis companies. Even main street brands like Coca-Cola said they are considering joining the party."
"A majority of U.S. states have legalized marijuana to varying degrees, and U.S. companies are scrambling to get in on the action," the AP Markets Team adds:
- "Both the NYSE and Nasdaq saw their first purely cannabis companies list shares in 2018. But stocks in the companies that produce and sell marijuana have largely underperformed the overall market this year."
An exception to the trend, per the Boston Globe: "New Hampshire’s libertarian streak has long been a source of pride for residents, but for cannabis users, that self-image isn’t living up to reality. With pot legalization sweeping through New England, New Hampshire is now an island of prohibition."
- "Unlike Rhode Island, whose governor recently said the tiny state could be driven by peer pressure into legalizing the drug soon, [the Granite State] wants to hold out against the rising political tide."
- "New Hampshire is surrounded by Vermont, Canada, Maine, and Massachusetts — all of which have legalized marijuana."
Flashback: The battle to legalize sports betting was won in May at the U.S. Supreme Court, and the specifics are being worked out in state legislatures and by the professional sports leagues.
Go deeper: "The high-stakes game for sports betting dollars."
