Tag Archives: marijuana

The Canadian Marijuana Sector Is The Next Big Thing

Gecko Research, Jan 4, 2017

There is an ongoing bull market that hasn’t been internationally recognized yet and that’s investing in the North American marijuana sector. One really needs to understand that there is one going on south of the border and another one north of the border. They are two completely seperate bull markets and at very different stages as well. One we love and one we wouldn’t touch with a ten-foot pole.

The U.S. marijuana sector is not only mature, it’s in quite a bad shape from an investor’s standpoint. The U.S. cannabis sector is years ahead of the Canadian and has at this stage gone so far as to attract scam artists. On the OTC alone there are now almost 400 companies that call themselves cannabis stocks. These are mostly penny stocks with no revenue or any prospects thereof. Investors that don’t suffer from a gambling habit should stay away.

In comparison, Canadadian listed marijuana producers are easy to keep track on as they are just a little more than a handfull. We believe that the marijuana sector in Canada is setting itself up to become the next big thing everybody wants to get in on. Sure, it hasn’t gone unnoticed that the sector has done very well this year and is currently working itself through a well-needed consolidation, but we think the bigger moves are yet to come as we are still in the early days.

We have started to look more closely into the sector and there are some quality companies out there. But what is very striking is the amount of crappy companies overwhelming this sector. For those of you interested to invest in marijuana, we urge you to be very picky and only go for the really high quality names.

Marijuana for recreational use in Canada is getting more and more acceptance and support. It looks like the changes in the laws will be put in motion to make it legal for anyone over 18 years of age to use. As most of you already understand, it doesn’t necessarily take for laws to have passed, it’s enough if people expect it to happen to get a huge amount of interest and investment dollars to get the bull market going at full speed.



In 1923 marijuana was prohibited in Canada and during the next 80 years, public opinion supported the unlegal approach to marijuana. Today we have a totally different situation both in Canada and around the world. More Canadians now prefer softer marijuana laws and according to a poll made by Globe and Mail, 68% of the Canadians now consider legalization of recreational marijuana to be a reasonable approach.

Justin Trudeau – The Road To Legalization
A year ago Justin Trudeau was elected Prime Minister in Canada after a record election of the Liberty Party. One of Trudeau’s first proclamations in office was the announcement that a federal-provincial-territorial process was being created to discuss a suitable process for the legalization of marijuana possession for recreational purposes.

This decision is driven by the wish to reduce access for young Canadians, remove cash flow from reaching the criminal sphere and to bring down the amount of taxpayer money used to enforce marijuana laws.

Trudeau first publicly expressed an interest in the legalization of marijuana back in the summer of 2013 when he said:

“I’m actually not in favor of decriminalizing cannabis. I’m in favor of legalizing it. Tax it, regulate. It’s one of the only ways to keep it out of the hands of our kids because the current war on drugs, the current model is not working. We have to use evidence and science to make sure we’re moving forward on that.” (source)


Marijuana in Canada

The Canadian marijuana sector today is worth approximately C$100M and it is growing rapidly. Patient growth is over 10% month-over-month (!) which means that in one year’s time Canada will have 360,000 registered patients. For you to better comprehend the significance, Health Canada has estimated that the market for medical marijuana, by 2024, could reach over 450,000 patients and be worth over $1.3 Billion. By the look of things, Health Canada is wrong by at least 6 years. The point we are making here is that the growth is much stronger than ever anticipated.

When legalization for recreational use becomes a reality, all numbers above becomes insignificant from an investor’s perspective. The marijuana sector in Canada will rapidly increase in size and many forecasts available today point to the range of a C$7-10B market. To put this number in context, Canadians spent C$8.7B on beer in 2014. We know we are still in early days when we have identified a sector that will grow from $100m to a multi-billion industry almost overnight.

With some of Canada´s most acknowledged businesses and entrepreneurs openly indicating their interest in the medical marijuana sector we guess the stigma that has surrounded cannabis for many years is starting to erode.

Investors need to be picky and should look to invest in those companies that will become large and robust. In the next 3-6 months, we want to invest in newly created enterprises with a solid business plan, great management and access to capital. We are looking to invest in just a few companies and get positioned for what we believe will be one of the best performing sectors in 2017-2018.

We believe that the companies of higher quality that are formed today will become majors in this sector. These are the companies that will over time offer best returns at the lowest risk.

The sector will cleanse itself over time as the strong companies will likely consolidate the sector as a whole while the weaker low quality companies will die and disappear. That’s why we are keen on identifying the higher quality new start-ups now and ride them as they grow towards becoming majors in the most interesting bull markets we have seen in a long time.


We have identified such a company which in fact is just about to go public, Emblem Corp.. There’s little doubt in our mind that Emblem will become one of the leading marijuana producers in Canada and we could easily see them reaching north of $1B Mcap within 24 months. We expect them to start trading somewhere around a C$250-300M Mcap.

Emblem Corp. (TSX-V: EMC)

Let’s walk you through the main points on what we believe will be one of the strongest entries by a Canadian marijuana company during 2016. On November 16th, Emblem announced the closing of one of the largest IPO’s (Initial Public Offering) ever done by a Canadian marijuana company. Emblem looks to commence trading on Friday December 9th on the Canadian Venture exchange, ticker symbol ‘EMC’.

Share Structure And Cash
The IPO was priced at $1.15/sh + 1/2 a warrant which with Emblem’s earlier financings gives Emblem a fully diluted share structure of ~111m shares (we might be off a little bit but we are close enough). That 111m shares includes warrants and stock options and when all of those are exercised it will bring in another ~C$36m in cash adding to the ~C$30m post-IPO cash position.

Access To Money
Simply a non-issue. In general, marijuana is becoming such a strong sector and this is recognized by the brokers and financial institutions. More importantly, which we will try to describe, is the quality of Emblem itself. When we started looking at the sector a few months ago, we found a couple of decent companies, but none of them convinced us as much as Emblem has.

We mentioned that the size of the IPO is C$23.7m but readers should be aware of the enormously big interest in Emblem. The book was nearly two and a half times oversubscribed and that is as good of a “quality approval” as anything. Emblem could have easily raised $55-60M if they had wanted to.

Valuating a company is so much more than just comparing numbers to its peer group. Over the years we have learned the hard and expensive way that who is running the business is definitely one of the most important things to look at before investing.

Producing, selling and distributing marijuana is not so much different from selling aspirin or any other pharmaceutical drug. We can’t really see a better mix of people running Emblem than this:

EMC_management_teamClick to open in new window


To see founders, management and employees invest their own hard earned money into Emblem is refreshing and it has made our investment decision so much easier. Six million dollars isn’t small money and it sends a clear message that they believe in what they are creating, one of the best marijuana companies in Canada. To see the people handling our money also having “skin in the game” is important to us and it should be important to you too.

Emblem Gets It – Three Legs To Stand On
In our mind, there are two approaches to the marijuana business, either you are an LP focusing only on production and wholesale or you take the same route Emblem has where they control everything from start to finish. Emblem has created three legs in its business:
1) Production
Phase 1 is already producing and Phase 2 will take Emblem to a total production capacity of 2,100 kg (Q2 -17). Phase 3 is already financed and will take total production to a rate of 11,600 kg (Q4 -17). Phase 4 could start producing in Q2 -18 and would bring Emblem’s total capacity to 21,100 kg. The timing for planned production expansions vs. when recreational marijuana consumption becomes legal might become nothing less than perfect for Emblem.

2) Pharmaceutical
This division is led by John H. Stewart, former President & CEO of Purdue Pharma Canada (1991-2006) and Purdue Pharma U.S. (2007-2013), one of the largest privately held pharmaceutical companies in the world. Marijuana is so much more than just smoking, the market segment for oils, gel caps, sprays, trans-dermal patches and pills is a huge potential revenue maker. Many of these products will actually be produced from parts of the plants that would otherwise have no other use, kind of like monetizing the by-products to use mining terminology.

3) Education
What’s important for every LP out there is to get patients to buy their product. Once a patient is registered they pretty much stay loyal to that LP. One way is to open up medical marijuana clinics which require large investments. Emblem’s approach is a much cheaper and cost effective way to acquire customers. Emblem establishes education centers within already existing medical clinics (1) as well as within stand-alone medical cannabis clinics (2).

Profit Margins
Production – Flowers
Emblem is not your average producer/seller, instead Emblem will deliver medical-grade marijuana from their state of the art production facility which we are convinced over time will reward the company with a premium for their product. But already today Emblem will enjoy huge margins on their production and sales (see chart below).

Starting up a new business is capital intensive but Emblem is fully financed through the phase 3 expansion. Most listed marijuana companies in Emblem’s peer group have yet to reach profitability. Emblem’s goal and prediction is that they will deliver a net income in Q3 next year, just ~9 months from now.

tableClick to open in new window

Production – Oils

Producers are now able to monetize the entire cannabis plant, not just the dried flower. To produce these oil products require specialized pharmaceutical industry expertise which is exactly what Emblem has.

The flower margins are looking good, oil operating earnings are a dream as they are projected to reach 90%. Or put in another way, it would be like selling a gram equivalent for $15 that cost $1.50 to produce. Estimated oil revenues from the first 12 months are expected to be $2.9m.

tableClick to open in new window

Timing From An Investment Perspective

Supply and demand. Probable legalization in 2017. These two circumstances argue that we are long ways from bubble territory. At the same time we have seen Canadian marijuana stocks double in price in the last three months (after 12 months of consolidation). These facts only reinforce the need for investors to be diligent in their research before making an investment decision.

We feel we have been just that, diligent, and we have come to the conclusion that we are in early days of what will be one of the fastest growing sectors, all categories, in the coming years.

Valuation And Comparison To Peers
At $1.15, Emblem would have a fully diluted Mcap of 128 Mcad, but on a fully diluted basis this would also mean holding ~$66m in cash. It doesn’t take a brain surgeon to understand that this valuation is not where Emblem will start trading at.

Let’s look at some of the peer group companies and their fd Mcap as per Dec 7th (1):
* Mettrum – 342 Mcad
* Organigram – 366 Mcad
* Aphria – 582Mcad
* Aurora – 728 Mcad
* Canopy Growth – 1,240 Mcad (2)
(1) Cash positions not taken into consideration
(2) Canopy reached a 2,070m Mcap when ATH C$17.86/sh was reached on Nov 16th

It’s obviously not fair to just look at Mcap’s, all companies have different production and growth profile, cash position and so much more. But it gives you a feeling of where Emblem could start trading at. We suggest you download each company’s presentation just to get a feel for the numbers and compare those to Emblem’s ditto.

Canopy Growth is the first Canadian marijuana company to reach a Billion dollar valuation (currently $956M Mcap). If plans become a reality, Canopy will reach a production capacity of 24,300 kg in 2018 while Emblem’s plans will take them to 21,100 kg in the same timeframe. By that calculation one could argue that Emblem will reach a Billion dollar Mcap in the not too distant future. It’s still not a fair comparison to make as Canopy have come further along. But it gives us a feeling and an idea of where Emblem very well could end up.

At this stage and with a long term view, one can probably throw a dart and buy any marijuana stock out there and still do extremely well in the coming years. Some caution is justified though because in the short term, the Canadian Marijuana Index look toppy. Emblem does provide us with an advantage as it’s not yet publicly traded and has a lot of catching up to do. Canadian investors are yearning for more names to invest in and we feel Emblem will be the top pick in the sector for others as well.

Remember, buying a marijuana producer is not like buying an early stage mining exploration play where one drill hole decides if your investment will be a success or not. Marijuana producers will not only be in an environment where they enjoy great margins on their product, they also have a production growth factor almost unheard of to consider.

The marijuana companies will be in an environment where they enjoy great margins on their product. However, one must be extremely picky and only invest in the truly high quality companies, the rest should be ignored. Look for 1) a great business plan 2) the right people to execute that plan and 3) make sure that the company has access to future funding as costly financings equals heavy dilution to shareholders.

Emblem Corp. Investor Presentation


1) Gecko Research (“the Author”) is not a registered financial advisor and investors should seek professional advice before making any investment decision. Our research is independent and is based on our view of the company or sector based on publicly available information. Factual errors might still occur, and it is every reader’s obligation to do their own research and not to solely rely on information given by the Author. The article is our view about the stock and do not constitute advice to buy or sell shares in the companies we discuss or any other company. The Author’s mission is to provide transparent viewpoints on companies we believe provide good investment opportunities. Gecko Research is almost always invested in the companies we write about and thus one can assume that there is some bias within our investment ideas. Although we see ourselves as long term investors, we might buy and/or sell the stocks we write about at any time. In no event shall the Author be liable to any person for any decision made or action taken in reliance upon the information provided herein. In other words, make your own decisions and proceed at your own risk. Investing in junior companies is associated with very high risk as well as extreme volatility. For those of you who cannot deal with that kind of environment, we think you should perhaps look elsewhere for investment ideas. As Gecko Research might occasionally be reimbursed for costs while visiting project sites or arranging investor presentations, Gecko Research does not get reimbursed for the articles we write. To learn more about Gecko Research, sign up for our free newsletter.

Lacing Dog Treats With Cannabis Is Big Business

Bloomberg, Dec 21, 2016

These treats are raising millions and helping Fido weather thunderstorms.

Lacing Dog Treats With Cannabis Is Big Business – Bloomberg

Even for a puppy, Kat Donatello’s black lab, Austin, was hyperactive. After experimenting with natural supplements on her older dog, Brady, Donatello slipped the puppy a special biscuit. “It just kind of took the edge off of him,” she recalled.

The treat contained Cannabidiol, better known as CBD, a chemical compound extracted from the marijuana plant.

The CBD supplements were expensive, and options for pet treats were limited, Donatello said. “So I started spending my winters baking dog biscuits.” She tinkered with the recipe before launching her CBD-laced biscuit company, Austin + Kat, earlier this year.

Along with Therabis and Treatibles, Austin + Kat is one of several Cannabidiol-for-dogs businesses that have popped up in the last two years, a time period during which CBD pet product sales nationwide doubled, according to data kept by cannabis industry analytics firm MJ Freeway. It’s the newest trend in America’s booming half-billion dollar animal supplements market, which is expected to grow by more than $150 million in the next four years.

CBD is one of over 80 active cannabinoid chemicals in marijuana, according to the National Institute on Drug Abuse. Unlike tetrahydrocannabinol (THC), CBD doesn’t create a euphoric sensation. In other words, these biscuits won’t get your dog high. But there’s some debate as to what effect the compound has on our furry friends and whether they should be consuming it at all.

Academic research about CBD’s affect on animals is nearly nonexistent, and the Food and Drug Administration has not approved marijuana use in animals. Despite this, some veterinarians recommend their use, and producers say pet stores are increasingly beginning to carry CBD treats. Treatibles is even in talks to be sold at a big box pet store, though an executive wouldn’t reveal which one, as the deal is still pending.

Veterinarians views on the supplement vary. When asked about the effectiveness of CBD in dogs, Dr. Robert Goggs said there is “virtually no evidence in the veterinary literature on this.” By contrast, Dr. Robert Silver and Dr. Gary Richter, both vets, recently hosted a course on the cannabis-dedicated learning website Green Flower entitled the “Cannabis for Pets Masterclass.”

Contacted by phone, Richter conceded that scholarly literature is lacking. “A lot of what we’re using is extrapolated data from humans, as well as just real world experience on what works,” he explained. If it works for humans, he argued, it could work for dogs.

In lieu of research, the CBD-for-dogs industry cites supportive veterinarians and customer testimonials as evidence of the products’ effectiveness. On Treatibles’ website, an interview with the owner of mixed-breed pup Shelby shows how the dog, plagued with anxiety and fear, was able to settle down after eating a laced treat.

Human studies have linked CBD to anti-seizure, anti-inflammatory, and anti-anxiety effects. In findings presented to the Senate Caucus on International Narcotics Control in June of last year, Nora D. Volkow, the director of the National Institute on Drug Abuse, said CBD could potentially aid those suffering from Alzheimer’s, stroke, multiple sclerosis, and Parkinson’s. Despite the largely positive feedback in Volkow’s presentation, she warned that additional research on CBD is necessary. The Drug Enforcement Administration (DEA) agrees and hopes to review further scientific studies on CBD.

CBD is often purchased online, which is technically a violation of federal law, according to DEA spokesman Russell Baer. “Extracts or derivatives from the cannabis plant are Schedule I controlled substances—just like the plant itself,” Baer said in an e-mailed statement. “There is widespread illegal distribution of purported CBD products—regardless if they are derived from the marijuana plant or hemp plant,” he added.

Understandably, the DEA’s attention is not on CBD at a time when the nation faces an opioid crisis, and sterilized cannabis seeds can be legally used in animal feed mixture. (When asked about the legality of the business, Therabis called it a “complex situation.” Austin + Kat’s Donatello expressed frustration with the DEA’s position in light of the federal Controlled Substances Act and her ability to purchase CBD products at Walmart.com. Treatibles did not reply to a request for comment.)There’s also the matter of ethics. Humans can verbally express discomfort when trying a new treatment. Man’s best friend cannot.

“If the proper administration of marijuana can truly relieve dogs’ pain, then they should be given the same consideration that humans in pain are given, with regular doses to help reduce their misery,” said Daphna Nachminovitch, senior vice president of People for the Ethical Treatment of Animals. “But it’s an entirely different matter to amuse oneself by getting the cat drunk or the dog high.”

While the researchers debate what, exactly, CBD can do for Fido, investors are excited by its increasing popularity, which has been buoyed by the legalization of cannabis (for humans) and increased dialogue about the medicinal properties of marijuana.

Treatibles founder Julianna Carella has seen sales explode “like wildfire” over the past two years. Therabis has experience equally explosive growth in its first year of business; since February, the company has seen revenue quadruple, and sales have grown 30 percent month-over-month, according to Joe Hodas, chief marketing officer of the treat brand’s parent company.

Troy Dayton, co-founder of the Arcview Group, an Oakland, Calif.-based investment firm, was a skeptic before he saw the sales numbers. “If humans are noticing in droves all the different ways where cannabis products can have utility for them, then surely there will be a massive application [for animals,]” he said.

Over the last two years, Arcview has been involved in fundraising efforts for two CBD pet-product companies. Dayton anticipates that additional capital will follow, particularly from investors leery of getting into the recreational cannabis market, which is legally murky. “There’s a lot of opportunity” in the CBD market, Dayton said.

“I’m not surprised at all that the space is growing,” Carella said. “There’s so many pet owners that would do just about anything to relieve their animals suffering.”


Ex-big pharma executive behind OxyContin sells medical marijuana

BBC News, Nov 25, 2016


John Stewart used to run the pharmaceutical company behind the narcotic painkiller OxyContin. Now he is banking on medical marijuana.

Mr Stewart does not know which is more controversial these days, OxyContin or pot.

He guesses the average person would give "a bigger negative" to the powerful and controversial painkiller that has been linked to the opioid overdose and addiction epidemic in the US and Canada.

"There is a lot of anti-opioid sentiment," he says, delicately. "And certainly based on the social disruption that we've seen it's understandable."

In the US, an estimated 1.9 million Americans were addicted to prescription opioid painkillers in 2014. Accidental overdoses from prescription painkillers quadrupled between 1999 and 2012. In 2014, drug overdoses were the leading accidental cause of death south of the border, driven by prescription opioids.

North of the border, some 15% of Canadians have an opioid painkiller prescription and 2% of those report abusing the drug.

But Mr Stewart has turned his attention elsewhere. He left Purdue Pharma in 2013 and is now a co-founder of Emblem, a medical marijuana company based in Paris, Ontario.

He credits his time at Purdue Pharma, which did some early research into therapeutic cannabis but never brought a drug to market, for sparking his current interest - finding better ways to deliver the medical benefits of marijuana to patients.

Marketplace newcomer

Now, his new job might just end up eating away at the bottom line of opioid manufacturers like the one he once worked for.

Doctors prescribe less pain medication in medical marijuana states. Recent research out of the University of British Columbia suggests cannabis has potential in helping to ease alcoholics and people addicted to opioids off their habit.

But Mr Stewart maintains there is still a place for powerful opioids that can help relieve severe and chronic pain.

"I saw a lot of patients who really, really, really had their pain improved by these drugs, of which OxyContin was only one," he says.

He also argues some people also abuse pot.

Emblem Pharmaceutical's John Stewart

Emblem is one of the newest entries into Canada's burgeoning marijuana marketplace. It received its license to grow and sell medical marijuana from Ottawa last year, joining 35 other competitors in an increasingly crowded marketplace.

Investors, which include Mr Stewart, believe it can eventually generate CA$100m ($74m; £60m) in revenue a year.

Ottawa brought in a new regime for medical cannabis - legalised in Canada in 2001 - in 2014, forcing patients to buy their medication through large-scale licensed growers that would ship them dried marijuana. Those new rules helped launch a commercial industry that's flourishing in the country.

Cultivators like Aphria, Mettrum Health, and Canopy Growth, currently Canada's largest medical marijuana producer, have become stock market darlings.

In October, Shoppers Drug Mart, one of Canada's major pharmacy chains, applied to distribute medical marijuana to the current cannabis patients, a number that is growing.

Right now, licensed producers can only ship the product to patients, which Mr Stewart calls "cumbersome". Patients can also grow limited amounts.

The federal Liberals also plan to introduce a bill this spring to legalise recreational marijuana across the country, which has further fuelled investment in the cannabis sector.

Big pharma fears

Emblem is also positioning itself to be part of the future recreational marketplace, which some estimates place at CA$22.6b . Its website, peppered with photos of millennials out with friends, urges visitors to join the "craft cannabis movement".

Mr Stewart's focus is the pharmaceutical arm of Emblem Cannabis, which will invest in research into things like dosing and plant strains as well as into the development of alternate forms of consuming medical marijuana like gel caps, sprays, patches, and pills.

Medicinal cannabis sold in Los Angeles before a 2012 ban

Not everyone welcomes former pharmaceutical executives to the pot business.

Mr Stewart admits corporate newcomers like him are met with a healthy dose of scepticism within the tight-knit marijuana business community.

"Nobody says to me to my face: 'We are terrified big pharma's going to come take over this industry.' However, they are," he says. "These days nobody wants big pharma, particularly in the United States, to do anything."

But he also says he meets people who see an opportunity to bring in capital to bolster research, improve quality control and consistency, and develop new products, something he says Emblem and other big cannabis investors will do.

"It's really only because of the work of a lot of pioneers in this who put themselves at great risk, legal risk , that we are where we are today," he says.


Legal weed: Tax jackpot or pipe dream?

CNN Money, Nov 8, 2016


It’s about the cash, not just the stash.

Voters in five states will decide Tuesday whether to legalize recreational marijuana, and a key argument for supporters is that it will bring in big tax revenue.

In California, advocates say legal pot could generate $1 billion a year, with much of it going to substance abuse education and programs to prevent driving under the influence.

Is that projection realistic? Other states that have approved non-medical marijuana offer some clues.

Colorado is probably the best example. Voters approved recreational weed there in 2012, the earliest of any state that still has it. And, like California, it already had legal medical marijuana, so there was already a network of medical dispensaries and growers.

Legal recreational weed went on sale in Colorado in 2014, and state economists had great expectations. Analysts projected that the first full fiscal year, through June 2015, would bring in $70 million in tax revenue.

“It was a brand new industry with new challenges, so any estimate was going to be educated guesswork,” said Joe Henchman, vice president of state and legal affairs for the Tax Foundation, a nonpartisan tax research group.

But just a few months after legal sales began, tax flow was disappointing, and economists decided they had been too optimistic. So they lowered that estimate to $54.7 million.

They should have waited. Sales picked up. Colorado wound up with $106 million in tax revenue from recreational weed from the first full fiscal year that it was legal.

As it turns out, the market was just getting started. The next year, the state pulled in $163 million.

“It took a little bit longer for the market to fully establish itself than originally projected,” said Taylor West, deputy director of the National Cannabis Industry Association.

Colorado is off to an even stronger start in its current fiscal year, which began July 1. The state reported $17.6 million for July and $19 million for August, its two strongest months so far.

Colorado charges a 10% sales tax on pot on top of its regular sales tax. Sellers cover a 15% excise tax, plus application and license fees.

In California, $1 billion a year is the high end of the estimate from the state Legislative Analyst’s Office. The low end is the high hundreds of millions.

That forecast is written right into Proposition 64, the ballot item that voters will consider. It’s based on cultivation taxes of $9.25 per ounce of buds and $2.75 per ounce of leaves, plus a 15% excise tax.

A billion dollars may seem small compared with California’s overall budget of $170 billion. But the revenue is earmarked for a slew of projects, including substance abuse prevention and treatment, cleanup of environmental damage from illegal pot growth, and programs to reduce drunken and stoned driving.

“I’m not trying to scoff at a billion dollars,” said Adam Orens, co-founder of the Marijuana Policy Group. “A lot can be done with it. Voters should take that into consideration.”

Recreational marijuana is also on the ballot in Massachusetts, Maine, Arizona and Nevada.

It is already legal in Washington, Oregon, Alaska and Washington, D.C. Two of those states, Washington and Oregon, have been selling legal weed long enough to provide reliable data.

Washington collected $77 million in taxes during its first full fiscal year of recreational legalization, which ended on June 30, according to the Tax Foundation. The current year is projected to bring in at least $270 million in taxes.

Voters were told that legalization would bring in as much as $1.9 billion over five years, said the Tax Foundation, with 40% going to the general fund and the rest going to substance abuse prevention, research education and health care. It remains to be seen whether tax revenue will match that forecast.

Oregon started selling recreational marijuana in late 2015. In the most recent month available, January 2016, it collected about $3.5 million in tax revenue — triple the expectation, according to the Tax Foundation.

Four states — Florida, Missouri, Arkansas and North Dakota — are voting on whether to legalize medical marijuana, which is taxed, but not nearly so much as recreational pot. California brings in about $50 million in annual tax revenue from medical marijuana.