The ancient Chinese philosopher Lao Tzu (500 BC) wrote: “To see things in the seed, that is genius.”

Lao Tzu is my favorite thinker. The historical record doesn’t tell us whether the venerable founder of Taoism was a stoner, but it’s well documented that the peoples of Asia discovered the psychotropic properties of cannabis several millennia ago.

Fast forward to 21st century America.

In 2021, the agriculture sector accounted for 18% of U.S. gross domestic product (GDP) and 29% of all American jobs. Agriculture contributed more than $200 billion to U.S. GDP.

And in cannabis, America’s farmers see things in the seed.

According to Leafly’s 2022 Cannabis Harvest Report, released this month, the wholesale value of marijuana across 15 adult-use states has reached $5 billion, making pot the sixth most valuable cash crop in the United States, outpacing familiar crops such as potatoes and rice.

All the more remarkable is the fact that marijuana remains illegal on the federal level. When the feds eventually lift the ban on cannabis, the industry’s room for growth will be explosive.

Because pot is federally banned, neither the U.S. Department of Agriculture (USDA) nor state regulators count the crop as they do other agriculture. To develop the report, research group Leafly pored over USDA values for non-cannabis crops, licensing records for legal marijuana states, sales and tax reports, commercial pricing data, and field measurements.

The Leafly report covers past 12-month data in some states and full-year 2021 data in others.

According to the report, the U.S. is home to about 13,300 farms that grow marijuana for adult use (in the 15 covered states). Within that number, more than 2,300 farms are growing hydroponic crops in the U.S.

The marijuana crop’s estimated $5 billion in wholesale value puts it above several American staple crops. The only crops that exceed marijuana’s value are corn, soybeans, hay, wheat and cotton (see chart).

The report states: “Americans want to end the Drug War and move consumers to a legal, taxed, and tested crop. Voters and community leaders need production, price, licensing, and crop value data to measure our progress. Regulators in some states cannot supply the most basic facts about their cannabis markets.”

The report’s researchers found that farmers grew 24% more metric tons of adult-use marijuana in 2021 versus the previous year. If medical marijuana states were included in the analysis, the total yield would be about three to five times larger.

That’s a lot of joints…

The sector in aggregate cultivated 2,834 metric tons of cannabis in 2021, which “would fill nearly 15,000 dump trucks lined up end-to-end for up for 45 miles.”

Allow me to provide some perspective: one metric ton of marijuana equals one million one-gram joints.

WATCH THIS VIDEO: Cannabis News That Investors Can Use

A state-level breakdown found that the wholesale value of adult-use marijuana ranged from $20 million in Vermont to $1 billion in California. Marijuana is the number one cash crop in Alaska, Massachusetts, and New Jersey.

Marijuana has become a major, integral part of the nation’s agricultural sector. And yet, because the substance is illegal on the federal level, many marijuana farmers can’t get bank loans, crop insurance, and other necessities that are widely available to conventional farmers.

“Simply put, local and federal governments do not treat cannabis farmers like farmers,” David Downs, the report’s lead author, stated. “There is systematic discrimination at the local, state, and federal level. Adult-use cannabis is a top cash crop in states where it’s legal, but that song goes unsung.”

However, several bills pending in Congress would rectify this punitive situation. As a result of the November 8 midterm elections, the marijuana-friendly Democrats retained control of the Senate, although control of the House remains too close to call.

With the Senate in blue hands, the odds of at least one marijuana legalization bill passing Congress are good. Meanwhile, in the midterms, Maryland and Missouri legalized recreational cannabis via ballot initiative, as did five cities in Texas.

According to New Frontier Data, a multi-year wave of state-level normalization of marijuana has made the U.S. the world’s largest legal cannabis market by a wide margin, generating more than $25 billion in regulated sales in 2021.

New Frontier expects legal cannabis sales in the U.S. to exceed $30 billion in 2022. Every time a state legalizes weed, it creates new markets, new customers, new jobs, and new investment opportunities.

For all of these reasons and more, I’ve launched a brand-new investment service. Called Marijuana Profit Alert, it’s your guide to making money from the cannabis boom. Click here to learn more.

John Persinos is the editorial director of Investing Daily. You can reach John at: mailbag@investingdaily.com

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