The marijuana market is expanding exponentially but compared to its long-term potential, “canna-business” remains in its infancy, akin to the computer industry in the 1980s.

Imagine having been able to invest in Apple (NSDQ: AAPL) during its formative years in the go-go Eighties, when visionary founder and Chief Executive Steven Jobs was just a bearded kid in a garage, rolling up his sleeves and getting started. You’d be very rich.

These days, investors seek “the next Apple” of marijuana. A good place to look? Publicly traded marijuana dispensary chains. They’re growing like weeds (pun intended).

Before marijuana legalization started to gain traction in the 1990s, the federal government’s anti-marijuana disinformation war had done an effective job of demonizing pot. Officials had convinced most citizens that marijuana was the “devil’s weed.” If you ever want a good laugh, watch the infamous 1936 movie Reefer Madness, a strident propaganda film that became a cult classic of inadvertent comedy.

And today? Society has pulled a 180-degree turn.

A vast majority of Americans (88%) think marijuana should be legalized to one degree or another, according to the latest Pew survey released in November 2022. In the United States, marijuana remains outlawed at the federal level, but increasing numbers of states are legalizing pot for medicinal as well as recreational use.

Medical marijuana has been legal in Canada since 2001. In October 2018, the country legalized on the federal level the possession and use of recreational marijuana. The move created an industry in Canada with CA$4.6 billion in annual sales in 2022.

The most striking cultural development regarding marijuana is the fast emergence of retail dispensaries. Depending on the laws where they live, millions of consumers currently have the ability to walk up to a retail outlet and legally buy marijuana, as if they were buying aspirin or a pack of gum.

Cannabis dispensaries are local government regulated physical locations, typically inside a retail storefront, in which a person can legally buy marijuana and marijuana-related products for medical or recreational use.

Among the most desirable marijuana investments in 2023 and beyond are marijuana dispensary chains that sell a broad variety of marijuana products, preferably in North America. The U.S. and Canada combined form the largest regional marijuana market in the world.

Dispensary products typically include flower, pre-rolls and flower pods, dry-herb vaporizer cartridges, concentrates for vaporizing, concentrates for dabbing, tinctures, lozenges, capsules, and edibles.

Dispensary operators are booming throughout the U.S., as cannabis retail outlets sprout up in downtown America.

WATCH THIS VIDEO: Cannabis Sector Outlook for 2023

However, when considering any investment, especially in the marijuana sector, it’s always prudent to give the bear case a full hearing.

The marijuana dispensary business can be risky. Many well-meaning entrepreneurs have found in recent years that they’ve put all of their eggs into the wrong basket while trying to open a marijuana dispensary.

Faced with confusing state laws, unfair and burdensome tax laws and local governments that pass ordinances severely restricting or outlawing marijuana cultivation and sales (sometimes years after dispensaries have opened their doors), dispensary owners that start retail outlets without gathering sufficient political and regulatory intelligence risk losing their investment.

And remember, marijuana remains outlawed in the U.S. on the federal level. Increasing numbers of states are legalizing pot, but Uncle Sam still bans it. The feds have left it to the states to come up with their own laws regarding pot, which has created a hodgepodge of regulations.

What’s more, the Republican leaders of the 118th Congress are avowedly anti-pot. Despite vague assurances by the U.S. Department of Justice that federal banking regulations will achieve clarity when it comes to cannabis, this goal still hasn’t happened.

The SAFE Banking Act, which has passed the House seven times but remains stymied in the Senate, is designed to solve this dilemma (see graphic):

The lack of access to standard banking services has been an impediment for marijuana dispensaries.

The winning argument…

Now the bull case, which is overwhelming.

Yes, the political climate could always change. However, despite posturing from marijuana prohibitionists, the normalization of marijuana laws is an unstoppable trend.

There’s simply too much money at stake and, at the end of the day, even the ultraconservative culture warriors in Congress are pro-business. You can expect plenty of anti-pot rhetoric in 2023 from the GOP-controlled House, but scant tangible action.

Regulatory impediments still exist but they’re on an inexorable path toward extinction, just like alcohol Prohibition in the 1920s.

Dispensaries are Main Street businesses, and they’ve set the table for growth in the coming year and beyond. In recent months, many of them have posted reassuring operating results and made smart strategic acquisitions. They’ve streamlined and implemented economies of scale. And they’ve been shrewd in touting themselves as tax-paying job generators.

The stronger dispensary chains also are possible takeover targets by larger rivals, perhaps even a non-marijuana consumer food and beverage company that wants to break into the lucrative cannabis industry.

Buyouts typically prove a boon for the shareholders of acquired companies. The key is finding the right investment choice. You need to be selective and practice due diligence.

That’s why I’ve launched a new trading service detailing how you can financially benefit from the growing use of cannabis.

Called Marijuana Profit Alert, my publication provides specific, actionable investment guidance for investors in the booming marijuana sector. Click here to learn more.

John Persinos is the editorial director of Investing Daily.

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