In honor of 4/20 being a celebratory holiday for marijuana, “Mad Money” host Jim Cramer had some words about the marijuana industry.
Cramer said on Friday, “[It’s] the hottest sector of the economy that remains totally illegal according to the federal government.”
Despite marijuana being legal in 29 U.S. states and Washington D.C. for medicinal purposes and being legal in nine states as well as D.C. for recreational purposes, marijuana is still illegal on a federal level.
“So while I may not be a cannabis connoisseur … and I don’t know the best way to tell you to get baked, I can absolutely help you figure out how to play the booming bud industry,” Cramer remarked.
“The issue is that there’s been a huge, cryptocurrency-like run in this group and it’s making most of these stocks too expensive for my taste,” Cramer explained.
“Of course, the Trump administration has very different views, especially our very old-school Attorney General [Jeff Sessions],” Cramer mentioned. “Sessions is not a fan of the marijuana industry and that makes investing in these stocks inherently more risky than investing in something that’s less legally murky.”
“Here’s the thing: legalization is horrible for pot pricing,” Cramer admitted.
“When states legalize, prices fall through the floor. I mean, it’s a plant, for heaven’s sake. The fact that it’s against the law is the only thing that makes it expensive, so if you’re betting on the state of the industry several years down the line, you really should bake that into your numbers.”