Barron's Recap: Should Pot Be Legal?

This weekend in Barron's online: the case for the legalization of marijuana, the hidden costs in tech and the prospects for Intel, Waste Management and recent spinoffs. Cover Story "Should Pot Be Legal?" by Thomas G. Donlan. According to the Pew Research Center, 52 percent of Americans now support legalizing possession of marijuana in small quantities. And more than half the U.S. states have taken steps toward its legalization. Furthest along is Colorado. The governor signed bills last week that determine how marijuana may be grown, sold, taxed and used in the state. It could be only a matter of time, says the article, before Washington and other states follow. It is not just a matter of personal freedom. Pot legalization could bring important economic benefits, such as sharply lower costs. That would put the squeeze on street gangs and drug cartels. And legalization could bring some relief to cash-strapped states, perhaps to the tune of $3 billion from marijuana taxes. It also would ease burdens on law enforcement. Arrests for marijuana possession rose by nearly a third between 1995 and 2011. Eight percent of all inmates of state and federal prisons are there for marijuana related offenses. The fly in the ointment is the federal government, which has made no moves toward pot legalization. The federal prohibition continues to trump state legalization. See the article to learn about efforts to require the feds to respect state marijuana laws, as well as moves by Mexico and the Organization of American states that may benefit the cause. Feature Stories "Beware the Hidden Costs in Tech" by Andrew Bary, among other things, warns that stock-based compensation can lead to understated price-to-earnings ratios for companies like Google GOOG, Amazon.com AMZN and Facebook FB. In "The Stars Are Aligning for Intel" by Jack Hough, it is suggested that as Intel INTC consumes more market share in tablets and smartphones, the stock price could double in the next five years. In the meantime, it offers a fat dividend yield. Reshma Kapadia's "Graduation Day for Spinoffs" says that, though investing in spinoffs and often their parent companies may be a way to market-besting returns, not all spinoffs are created equal. The article offers four ways to play the most recent wave spinoffs. New leadership has allowed Waste Management WM to modernize its image and step up its game, says "Turning Trash to Cash" by Reshma Kapadia. The article turns the spotlight on CEO David Steiner, who discusses the company's focus on pricing. "In Vino Veritas" by Andrew Bary discusses Crimson Wine Group, one of a few publicly traded winemakers. It was spun off from Leucadia National LUK back in February. One benefit for shareholders is the 20 percent discount on Crimson Wine products. In "The Gold Standard," Sarah Max profiles Joseph Foster of Van Eck Global. This former geologist oversees all of the firm's actively managed gold funds. Despite recent setbacks, says the article, the featured fund is ready to shine. David Englander's "Trucking Toward a Recovery" takes a look at small cap Quality Distribution QLTY, which transports chemicals and operates in the shale-gas and oil business. With truck demand on the rise, earnings are ready to grow. Marc Faber, publisher of the Gloom Boom & Doom Report, is no fan of the money printing by central banks. In "Bubble, Bubble, Money and Trouble" by Lauren R. Rublin, he shares why he is bullish on Asian markets such as Vietnam, as well as European telecom and utility shares. "If This Goes On... " is an editorial commentary by Thomas G. Donlan in which he suggests that a brief victory in a currency war is likely to produce a long defeat. Columns Columns in this weekend's Barron's discuss: