Chart source: thinkorswim® by TD Ameritrade . Data source: Standard & Poor’s. Not a recommendation. For illustrative purposes only. Past performance does not guarantee future results. Eight states and Washington D.C. have legalized the recreational use of marijuana, and 44 states have laws governing medicinal use. Laws vary from state to state, which adds complexities that can result in companies or individuals violating state production and distribution laws. An even greater source of uncertainty for companies is that all these activities are illegal under federal law because marijuana is still a Schedule I substance under the Controlled Substances Act. The U.S. Drug Enforcement Administration defines Schedule I substances as “drugs with no currently accepted medical use and a high potential for abuse.” How are these companies getting away with it then?