As States Legalize Marijuana, Investors See an Opportunity

New Jersey’s new governor, Phil Murphy, made access to medical marijuana easier in the Garden State this week. A few weeks earlier, California, with its nearly 40 million people, legalized recreational marijuana use, having cleared the way for medical marijuana in 1996.

Twenty-nine states now allow marijuana for medical purposes, while eight have legalized its recreational use. As the acceptance of marijuana is growing, so are the opportunities to invest in it.

High-net-worth individuals have become a go-to source of investment dollars. This is partly because of the size of many of the companies, which are generally too small for institutional investors. But it’s also because many of the companies require affluent investors who are willing to operate in a moral and legal gray area.

Marijuana remains illegal at the federal level. This month, Attorney General Jeff Sessions rescinded an Obama-era policy that discouraged federal prosecutors from pursuing cases involving marijuana.

Because of questions about the legality of marijuana, many banks will not accept deposits or conduct business relationships with cannabis companies. And for some wealthy individuals, like those with…

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