Marijuana legalisation: blunt demand - FT.com "I do say it would be a nice thing if we could raise enuff Hemp to pay our rates," John Adams said in 1763 - before becoming a founding father of the United States. A few years on, there were queues this week to buy even small amounts of the stuff in Colorado. On January 1 the state became the first in the US to host legal marketplaces in recreational marijuana. Although federal law still forbids pot sales, Washington state will follow in 2014. Investors may also see this trend as a nice thing. But where in the haze will profit actually lie? The best bet may well be exposure to revenue that states get from taxing marijuana sales. This ultimately means designing bonds backed by those taxes, a far from impossible feat in US municipal debt. Venture-investing in fledgling US cannabis industries seems less sure. The Coloradan model might already point the way. The state will slap a 25 per cent levy, on top of its 3 per cent sales tax, on marijuana. The drug can fetch $200 or more an ounce already. An ounce is also the most tokers will be allowed to buy at a time (possession of more than that remains a crime). Stores are for now mostly cash operations: banks remain wary of federal law in doing business with retailers, despite Coloradan politicians" appeals to the regulators. Invest in a venture providing security to pot merchants? Perhaps. The ArcView Group, a network of investors in cannabis businesses, sees a $10bn market in the US within five years. But this assumes 14 more states legalise marijuana beyond medical use. Change is in the air - almost two-thirds of Americans support legalisation, polls say. It is harder to tell when a particular state's voters will inhale. When they do however, taxation will follow and could well become an important tool to make pot safer - for example, by targeting chemical strength rather than volume. Pass the bong bonds, please.