Insider Monkey

Insider Monkey is a financial news website and we closely watch addictive products because these companies' shares usually outperform the market over the long-term. We aren't just talking about tobacco stocks like Altria Group, Inc. (NYSE:MO) and alcohol stocks like Constellation Brands, Inc. (NYSE:STZ), but sugar companies like The Coca-Cola Company (NYSE:KO), and social media stocks like Facebook Inc (NASDAQ:FB) and its enabler Apple Inc. (NASDAQ:AAPL) (if you don't think Apple and Facebook aren't addictive, try to live without them for a week). The size of the tobacco market is close to $50 billion in the United States. The size of the alcohol market is nearly $175 billion. The addictive fast food market is around $650 billion, and you know about the market values of Facebook and Apple. Addiction is a huge part of our economy and companies that market addictive products are potentially great investment opportunities. We don't have direct estimates for the size of the illegal drug market in the United States. RAND Corporation estimates that Americans spend close to $150 billion for the top 4 drugs used in this country. Since the top four drugs account for about 70% of the market, we can estimate that the size of the illegal drug market is north of $200 billion. A large percentage of these drugs are distributed by Mexican drug cartels and their partners (see our article about the 13 U.S. cities that are crowded by Mexican drug cartels). Americans might be spending $200 billion on illegal drugs, but the economic and social impact of our drug addiction is several times bigger. A 2017 Bureau of Justice report estimated that 21% of incarcerated people are in prison for crimes committed to obtain drugs or money to buy drugs. That means around 500,000 people are behind bars because of our drug addiction. These people are responsible for creating tons of jobs for law enforcement officers as well as healthcare workers. We have a feeling that Bureau of Justice's estimate is actually too conservative.