Where do You draw the line?

Written by:  Cassandra Laymon, CFP®, MBA

This month the website Financial Planning published an article announcing that American Funds (largest mutual fund company in the US) is launching a new growth fund aimed at profiting from the medical and recreational use of marijuana.  This may come as a big shock to you (it did me!) – that a company would encourage investors to invest in a fund that promotes the use of a drug.

If you have been reading our blog for any time now, you know that Beacon Wealth Consultants does not invest in companies engaged in certain business activities and practices that run counter to biblical principles, including those that we believe would “cause our brother to stumble.”

“So let’s stop condemning each other.  Decide instead to live in such a way that you will not cause another believer to stumble and fall.” ~ Romans 14:13 (NLT)

Any company that relies upon its customers becoming addicted to their product in order to sustain and grow revenues would fall into this category. The marijuana industry takes this corporate exploitation to a whole new level, in our view.

The following graphic from June of this year shows how many states have legalized the use of medical marijuana. Recreational use is legalized in a few states, with many more states working toward it in the near future:

US Map Legalized

It will come as no surprise that I have a BIG problem with this.

First, the school system in my area has done a spectacular job at the middle school level of instilling the danger of drugs into our kids.  My son and his friends are all anti-drinking and anti-drug on a very surprising level. I overhear their conversations when they don’t think I’m paying attention, and it gives me peace that they are using their heads to make good decisions. I am fully aware that this attitude may not last forever, but I pray that it does.

The legalization of marijuana “un-does” all the good behaviors we have instilled in our kids. Which will then cause them to wonder, “what else have I been taught to avoid that is really Ok?”  I liken it to when I discovered that Santa Clause is not real. I figured if he’s not real, maybe God isn’t real either. My faith suffered for many years because of that.

As you probably know, marijuana is an entry-level drug that often leads to other drug use. However, let’s just focus on marijuana for now. According to the Foundation for a Drug Free World, here are some of the short-term and long-term effects of marijuana use 1:

SHORT-TERM EFFECTS

•    Sensory distortion
•    Panic
•    Anxiety
•    Poor coordination of movement
•    Lowered reaction time
•    After an initial “up,” the user feels sleepy or depressed 
•    Increased heartbeat (and risk of heart attack)

LONG-TERM EFFECTS OF MARIJUANA

•    Reduced resistance to common illnesses (colds, bronchitis, etc.)
•    Suppression of the immune system
•    Growth disorders
•    Increase of abnormally structured cells in the body
•    Reduction of male sex hormones
•    Rapid destruction of lung fibers and lesions (injuries) to the brain could be permanent
•    Reduced sexual capacity
•    Study difficulties: reduced ability to learn and retain information
•    Apathy, drowsiness, lack of motivation
•    Personality and mood changes
•    Inability to understand things clearly

There are numerous other problems we could discuss here, like the challenges for police officers enforcing DWI laws with the increase in marijuana-intoxicated drivers, the increase in emergency room visits due to kids ingesting too many marijuana “edibles,” (candy, brownies, etc.) and the increase in the homeless population in Denver since the legalization of marijuana.2

With that said, let me bring you back to the original topic – investing in marijuana companies.

When faced with an “investment opportunity” such as this, I think it’s important to remember what it means to be an owner of a company when you invest.

First, let’s agree that all companies must make a profit to stay in business.  One of the ways they can grow their business is to raise capital by issuing stock.  This allows them to do more of what they are already doing.  As an investor, you are in fact part owner of these companies. Therefore, when you invest in a company (either through stocks or mutual funds) you are praying with your investment dollars that this company will become wildly successful, and get more and more people to use their product.

Quite clearly, when you invest in the American Growth Fund Series Two Class E, your goal is get as many people as possible addicted to marijuana so you can continue to profit. While the fund manager says that the cannabis industry is not intended to be the sole focus of the fund, American Funds by prospectus plans to invest a minimum of 80% of its portfolio in the industry.

You might think that investing in a fund like this is not a big deal. You’re just one little investor, right?

“You say, ‘I am allowed to do anything’—but not everything is good for you.
You say, ‘I am allowed to do anything’—but not everything is beneficial.”
~ 1 Corinthians 10:23 (NLT)

Some readers will say, “this is crazy! I would never invest in a fund like that!” The truth is, you may be unknowingly invested in and be promoting any number of business practices with which you disagree. You may be invested in companies that are involved in the abortion industry, supporting Planned Parenthood, distributing pornography and promoting addictive behaviors.

And you don’t

Even

Know it.

The question is, where do You draw the line?

Is it ok to invest in “some” marijuana, or “a little” pornography?  This is a decision that is made between you and God. I encourage you to pray about your investments, and listen to God’s leading on this very important issue.

If this is a new idea to you, you may be wondering how to find out what business practices you are invested in. This is a great time to ask your financial advisor to review this with you. If they do not have the tools necessary to screen your portfolio, please email us at info@beaconwealth.com and we will be glad to provide a complimentary screening so you can gain a clear understanding of the businesses you are promoting.

 

1 http://www.drugfreeworld.org/drugfacts/marijuana/short-and-long-term-effects.html

2 http://thefederalistpapers.org/us/colorado-having-buyers-remorse-after-legalizing-pot

 

Financial Planning & Investment Advisory services offered through Beacon Wealth Consultants, Inc., an Investment Adviser registered with the US Securities and Exchange Commission.