East Coast market looks good to medical cannabis industry
Up to a dozen states could legalise adult-use or medical marijuana in 2020
States across the East Coast are expected to address possible legislation of recreational and medical marijuana this year, with up to a dozen states likely to bring regulations in, potentially reeling in billions of dollars in business opportunities for the burgeoning cannabis industry. Mississippi in particular has a business-friendly medical cannabis initiative that has qualified for the 2020 ballot. Adult-use legalisation efforts in New York and New Jersey stalled in 2019, but expect to see them on the drawing board again for 2020.
Trends to look out for:
In 2019 Illinois unexpectedly legalised a projected $2 billion adult-use program which could trigger a domino effect in 2020.
State marijuana laws are maturing. Legalisation increasingly involves conversations over what has worked and hasn’t worked in legal states.
The industry is expected to see more diversity as we move into the new year, with communities that have been hard hit by the war on drugs given more consideration.
Democratic governors in the Northeast are trying to coordinate adult-use legalisation efforts, with common approaches to licensing, taxation, minority and small-business participation, product potency on the table. Cannabis businesses would still need a lot of resources to apply for licenses and to operate on the East Coast, but they might be able to use one application as a template for others in the region.
The states driving change:
Vermont: The state Legislature legalised adult use and home growing two years ago, and in 2019, the Vermont Senate gave its blessing to a commercial sales program. The state House of Representatives is likely to follow suit this year.
New Jersey: Lawmakers voted to put the issue on the November ballot, where it has a good chance of passing. The initiative is broadly written, meaning the state would decide licensing specifics later.
New York: Cuomo has made adult-use legalisation a top priority again this year. But potential stumbling blocks remain, including agreeing on where revenues should go and ensuring communities of colour benefit from legalisation.
Connecticut: Democratic Gov. Ned Lamont started predicting last year that Connecticut would legalise adult use, and he’s emerged as a key player with New York’s Cuomo in the effort to develop a regional approach. Connecticut also is feeling the effects of Massachusetts’ legalisation of recreational marijuana.
New Mexico: Sentiment shifted toward legalisation when Gov. Michelle Lujan Grisham took office in 2019. Legislation stalled in 2019, but a governor’s legalisation advisory group is setting the stage for an agreed-upon approach this year.
South Dakota: 2020 will mark the first time a state has voted on medical and adult-use legalisation on the same ballot. The adult-use initiative calls for a 15% sales tax. The state Department of Revenue would determine licensing, with a mandate to allow enough licenses to drive out the illicit market.
Arizona: Two initiatives are in play, including one that calls for an 18% excise tax. Even if one makes the ballot, passage is uncertain.
Montana: National groups are backing a ballot initiative in Montana, which also could put pressure on a resistant state Legislature to consider a pre-emptive bill.
Pennsylvania: Democratic Gov. Tom Wolf has come around on the issue, and he participated in Cuomo’s Northeast summit. But state Senate Republicans recently were adamant they have no intention to consider a legalisation bill this year. However, if New York and New Jersey both legalize, pressure could increase on Pennsylvania to do so as well.
Florida: Proponents ran out of time to collect the 766,200 signatures needed to place the adult-use marijuana issue on the ballot. The group backing the initiative, Make it Legal Florida, recently filed a suit challenging the constitutionality of the state’s ballot initiative process. That group announced Monday it will instead focus on getting recreational marijuana on the 2022 ballot.
Stats courtesy of Marijuana Business Daily.
Medical cannabis prospects
Alabama: One of the most conservative states in the nation, Alabama is actually one of the more likely to pass a medical cannabis program via its Legislature in 2020. A study commission approved a draft bill that would legalise MMJ for diagnosed medical conditions but prohibit smokable flower and edibles.
Mississippi: This deep south state has a strong chance to pass a medical cannabis program via ballot initiative in 2020. The initiative is very business friendly too, with no limits on the potential number of licenses. The state must contend with opposition from the Board of Health however.
South Dakota: Voters will decide on a medical cannabis initiative that gives local governments the power to decide how many licenses are issued in their jurisdiction.
Kentucky: The home of U.S. Senate Majority Leader Mitch McConnell has remained focused on cultivating a large hemp industry, but in a step toward legalising medical cannabis, the state House Judiciary Committee approved an MMJ bill in 2019.