I was born when Eisenhower occupied the White House, Cadillacs sported tail fins, and Marilyn Monroe was getting her skirt lifted by the blast from a subway vent. That makes me old enough to remember when marijuana was associated in the public mind with sociopaths and criminals.

Generations of Americans grew up thinking of marijuana as nothing more than a noxious weed used by undesirable members of society.

That all started to change in the 1990s, with the advent of a new law on the state level. It was a watershed moment for marijuana, but many people who follow the marijuana industry aren’t even aware of this law.

In 1996, the voters of California agreed to allow patients and their caregivers to possess and cultivate marijuana for therapeutic purposes. Known as the California Compassionate Use Act, Proposition 215 created the country’s first open marijuana market.

Prop 215 gave birth to a wave of state legalization laws, both medical and recreational, that have made possible a new, multi-billion dollar industry.

The revolution spawned by this single statutory change in California, back in 1996, is a reminder that investors need to keep an eye on the ever-changing legal landscape for marijuana.

Let’s see what’s happening throughout Cannabis Nation and how these legal developments might affect your portfolio of pot stocks.

First, a quick primer to avoid confusion:

“Cannabis” is a genus of flowering plants that includes the primary species cannabis sativa. Put in simple terms, both hemp and marijuana are strains of the cannabis sativa species.

Marijuana has high levels of tetrahydrocannabinol (THC), the psychoactive chemical that produces the “high.” Hemp has relatively low levels of THC, but the plant’s fiber and seeds boast a wide variety of uses.

The Federal Level

The U.S. Department of Justice on Monday filed a brief in a free speech case defending the right of college students to speak out on marijuana legalization and other issues.

The brief stated: “The United States of America is not a police state. Repressive speech codes are the indecent hallmark of despotic, totalitarian regimes. They have absolutely no place in our country, and the First Amendment outlaws all tyrannical policies, practices, and acts that abridge the freedom of speech.”

Marijuana is illegal on the federal level, but the Justice Department sided with a Mississippi student who filed a lawsuit against his college after he was prevented from talking about marijuana legalization earlier this year. The student argued that the First Amendment protects students who discuss legalization.

When campus police were called to stop the student, who was polling his colleagues on marijuana reform in April, that violated his right to free speech, the department said.

The U.S. Food and Drug Administration (FDA) this week published an overview of the research and approval process for cannabis and the compounds derived from it (known as cannabinoids). This is a significant step that should pave a clearer regulatory path for medicinal marijuana companies.

The FDA has only approved one cannabis-derived drug product: Epidiolex (from cannabidiol, aka CBD oil), and three synthetic cannabis-related drug products: Marinol (dronabinol), Syndros (dronabinol), and Cesamet (nabilone).

Epidiolex contains a purified form of CBD oil for the treatment of seizures associated with Lennox-Gastaut syndrome or Dravet syndrome in patients two years of age and older.

Marinol and Syndros are used to treat nausea associated with cancer chemotherapy and for the treatment of anorexia associated with weight loss in AIDS patients. Marinol and Syndros include the active ingredient dronabinol, a synthetic version of THC.

Synthetic cannabis is a hugely promising field, because it allows marijuana companies to file patents for their breakthroughs, which in turn offsets the trend toward commoditization of the plant and its products.

Cesamet contains the active ingredient nabilone, which has a chemical structure similar to THC and is synthetically derived. Cesamet is indicated for nausea associated with cancer chemotherapy.

These FDA-approved cannabis-based drug products are only available with a prescription from a licensed health care provider.

FDA operates programs such as Fast Track, Breakthrough Therapy, Accelerated Approval, and Priority Review, all of which are designed to expedite the development and approval of new drug treatments.

Many marijuana biotechnology companies have submitted applications or received the okay for admission to these programs. When the FDA gives the green light to a marijuana biotech to enter one of these programs, the stock usually soars. Also keep in mind, many struggling pot biotechs are purposely positioning themselves as takeover targets by Big Pharma.

The State Level

New York Gov. Andrew Cuomo (D) on Monday signed a hemp regulation bill into law and announced the state will hold a hemp summit next month.

U.S. and state regulators last week informed financial institutions that hemp businesses should not be regarded with any more suspicion than other clients.

Read This Story: Coping With The Cannabis Cash Crunch

Hemp is now legal in the U.S., thanks to passage of the 2018 Farm Bill. Signed into law on December 20, 2018 by President Trump, the sweeping agricultural legislation essentially decriminalizes hemp.

Hemp has the potential to be an even bigger industry than its cousin, marijuana (see chart).

Illinois regulators on December 10 began accepting applications for new recreational marijuana retail licenses.

Virginia regulators are moving to ban vitamin E acetate in medical cannabis vaping devices instead of implementing a total ban on THC and CBD vapes.

North Dakota activists submitted a proposed 2020 marijuana legalization ballot initiative.

In 2018, a legalization measure filed by the same group provided no licensing requirements and no limits on possession or cultivation. The proposal was widely defeated at the polls, which isn’t surprising in light of the state’s socially conservative nature.

However, the lesson wasn’t lost on Legalize ND, the group behind the proposed statutory initiatives. The new version includes strict regulations and bans the home cultivation of marijuana.

Got any questions or comments about pot stocks? Drop me a line: mailbag@investingdaily.com

John Persinos is the editor-in-chief of the twice-weekly newsletter Marijuana Investing Daily. He also writes Mind Over Markets, a daily overview (Monday-Friday) of the financial markets.