The largest pension fund in the US embraces cannabis, not in tobacco
Almost 20 years ago, the California Public Employees’ Retirement System (Calpers) gave up on tobacco stocks and created a policy that would prohibit any future investments in any company that dealt with tobacco. The move was in response to “concerns over ongoing litigation and regulatory risks facing the tobacco industry,” but the pension fund has decided that there is no problem with the cannabis industry. Calpers now holds a position in several cannabis-related companies.
The investments are reportedly relatively small, but have not been completely detailed. What is known is that the pension fund has invested in Tilray and GW Pharmaceuticals – the company behind the cannabis-based epilepsy drug Epidiolex. Calpers is also into Constellation Brands, the beverage company that has a 38% stake in Canopy Growth.
The move shows smart investments, given Canada’s adoption of recreational marijuana and the fact that similar actions are expected in the US, as well as other countries around the world. All of those will only drive cannabis stocks up even more.
Some Calpers members wanted to get rid of the tobacco ban a few years ago, but their efforts were denied. At the times, the executive director of the Commissioned Officers Association of the US Public Health Service, Jim Currie, stated, “I hope that you will not do this (end the ban) for two reasons: (1) you will not gain investment income by providing financial support to entities that are killing hundreds of thousands of people a year with their products, and (2) you have such a presence in the world of investment that your decision might well trigger a stampede in that direction.”