Cannabis markets on the ballot could generate $3 billion in first year

If approved by voters on Tuesday, new regulated adult-use marijuana markets in Florida and North Dakota – along with a medical cannabis market in Nebraska – could collectively produce $3 billion during the first full year of sales.

Together, the markets are likely to reach $4.3 billion in marijuana sales by the fourth year of operation, according to analysis from the MJBiz Factbook.

Most of the projected revenue would come from Florida, provided voters there approve adult-use sales during the general election on Tuesday.

The state’s 22 million residents and estimated 140 million yearly visitors are likely to spend roughly $2.9 billion on regulated adult-use marijuana once Florida’s new market is launched, putting the state in position to compete with California and Michigan as the largest cannabis market in the United States.

With only a fraction of Florida’s population, North Dakota is projected to see $70 million spent on recreational marijuana during the adult-use market’s first full year of operation, should voters approve Initiated Measure 5.

Meanwhile, a new medical marijuana market in Nebraska could bring in $50 million in sales.

If both Florida and North Dakota set up adult-use markets, 60% of the U.S. population would have access to regulated recreational marijuana, and 78% of the population would have access to medical marijuana if Nebraska voters approve the two MMJ ballot initiatives there.

Adult-use marijuana is also on the ballot in South Dakota this year, but Initiated Measure 29 doesn’t establish a regulated market for sales.

Florida Amendment 3

There is no doubt Florida would become a huge marijuana market once adult-use sales begin, as 7% of the U.S. population lives in the state, and only California and Texas have larger populations.

Florida also has a thriving tourism industry and a robust medical marijuana program with roughly 883,000 patients spending about $2 billion on regulated MMJ per year.

Polls suggest Florida Amendment 3 has the votes to pass, but there is some question as to when sales would launch.

If everything goes well, the new law would take effect in May, but the Republican-controlled Legislature could create roadblocks that delay the launch date.

Some industry stakeholders believe Florida lawmakers are likely to follow Ohio’s example and allow adult-use sales to begin while slowly working on follow-up legislation

When the adult-use market does launch, Florida’s built-in MMJ infrastructure will allow it to quickly become a top market for recreational marijuana sales in the United States.

Look for Florida to reach $2.9 billion in recreational marijuana sales during its first full year and to surpass $4.1 billion by the fourth year of sales.

Nebraska Initiatives 437 and 438

Nebraska voters were supposed to decide whether to legalize medical marijuana in 2020, but the state’s Supreme Court ruled the measure violated a single-subject rule and removed it from the ballot that September.

To work around the issue this year, Nebraska cannabis advocates got two different marijuana initiatives placed on the ballot: The first would allow patients to possess and use medical marijuana; the second would establish an agency to regulate the program.

Legal wrangling has resumed this year with a last-minute court challenge - even as voters have started to cast their ballots for the Nov. 5 election.

Those opposed to legalizing medical marijuana might have only the courts to slow a market rollout, as recent polls suggest Nebraskans favor medical marijuana legalization by 59%.

With roughly 2 million residents, Nebraska has the potential to be a $100 million-per-year market.

If voters approve Nebraska Initiatives 437 and 438, look for MMJ patients to spend $50 million on medical marijuana during the program’s first full year and about $102 million by its fourth year of operation.

North Dakota Initiated Measure 5

For the third time since 2018, voters in conservative North Dakota will consider legalizing recreational marijuana.

While recent polls suggest this year’s measure might struggle at the ballot box, if the initiative passes, it would set up a licensed system for adult-use sales by October 2025.

The sparsely populated state will never be a huge adult-use sales driver, but it does have more residents than Alaska and Vermont, both of which have established recreational cannabis markets.

Initial adult-use sales in North Dakota would be buoyed by a medical marijuana program that has been active since 2019 and supports nearly 10,000 MMJ patients.

Medical marijuana sales more than doubled from 2020 to 2021 but have since cooled.

State-regulated medical marijuana sales reached $22.4 million for the fiscal year ending in June 2024, a 3.8% gain from 2023.

Look for the first full year of adult-use marijuana sales to top $70 million with the possibility of $115 million in sales by the fourth year of operation.

Overall sales could be impacted by the amount of sales tax the North Dakota Legislature levies on recreational marijuana - a detail not specified in North Dakota Initiated Measure 5.

The financial impact report that voters will see printed on the ballot was largely based on a 5% tax.

Higher tax rates would hamper the growth of an adult-use MJ market in North Dakota.

Andrew Long can be reached at andrew.long@mjbizdaily.com.