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The nationwide coronavirus outbreak could set back cannabis legalization efforts along the East Coast and elsewhere, raising further questions about the launch of lucrative new adult-use and medical markets in New York and other states.
Those potential markets, if launched, could generate billions of dollars in business opportunities for a range of marijuana companies.
But the outlook for legalization in those places now seems up in the air.
Additionally, several cannabis ballot initiatives across the country, including a recreational initiative in Ohio, could suffer, especially if a prolonged disruption of daily lives prevents petition drives from collecting enough signatures ahead of official deadlines.
A medical marijuana petition drive in Nebraska, for example, was suspended last week.
New York adult-use MJ doubts
New York, a potential multibillion-dollar adult-use cannabis market, is the biggest question mark.
While Gov. Andrew Cuomo said marijuana legalization remains a high priority in his budget plan, experts say it looks more likely by the day that the measure could be delayed or derailed because of coronavirus.
Key lawmakers such as New York Senate Deputy Leader Mike Gianaris, a Democrat from Queens, indicated legalization might need to be postponed as lawmakers deal with the most pressing budget issues amid tighter restrictions because of coronavirus.
“I think New York is still very much up in the air,” Jeremy Unruh, PharmaCann’s director of public and regulatory affairs, told Marijuana Business Daily.
Unruh wrote in an email to Marijuana Business Daily that he’s heard that Cuomo is going to include marijuana legalization in his budget bill and also that “cannabis is too controversial for the governor to get in his budget under the circumstances.”
New York’s fiscal year starts April 1, so the Legislature is under pressure to pass the budget bill by then.
Rob DiPisa, co-chair of the cannabis law group at Cole Schotz in New Jersey, had a similar take on the uncertainty of adult-use legalization in New York.
New York’s main focus right now is to contain infections and protect public health, so “it’s likely the virus will delay New York’s efforts to pass the legalization of recreational cannabis through the budget,” DiPisa said.
Though there is plenty of incentive to push through legalization at some point this year, it would be easier to do so as part of the budget bill.
New York already faced a multibillion-dollar budget gap, and resources spent containing coronavirus could make the state even more desperate for revenues that recreational cannabis legalization could provide.
In addition, lawmakers in neighboring New Jersey already have placed adult-use legalization on the November ballot. That action increases the pressure on New York to follow suit or lose revenue to a rival across the border.
Here is where some other major legalization efforts currently stand:
Vermont: The state’s House and Senate both passed a recreational marijuana legalization bill, but they disagree on the tax rate and other issues. The Legislature has adjourned until at least March 24 because of coronavirus.
“The good news is that the House and Senate did form the conference committee (to hash out the differences in the bills) before adjourning,” Matt Simon, Marijuana Policy Project’s New England political director, wrote in an email to MJBizDaily.
Those six lawmakers can work on finalizing the measure during the break, Simon said.
“We’re still confident that the bill will proceed to the governor’s desk when the legislature reconvenes,” Simon wrote. But it’s still uncertain whether Gov. Phil Scott, a Republican, would sign the bill.
Connecticut: Adult-use legalization via the state’s General Assembly is still in play, but the virus has created a “very fluid situation,” Karen O’Keefe, director of state policies for the Marijuana Policy Project, wrote in an email to MJBizDaily.
She noted that Gov. Ned Lamont’s legalization bill received a public hearing in the Judiciary Committee on March 2, but Connecticut’s General Assembly has been shut down until at least March 30 because of coronavirus.
The closure raises questions about how much business can be done before the Legislature is scheduled to adjourn May 6.
If adult-use legalization isn’t passed during this session, it’s possible it could be included in a special session this summer focused on the economy, O’Keefe said.
Other adult-use legalization efforts
Arizona: Smart and Safe Arizona reportedly has collected enough signatures to place a recreational marijuana initiative on the November ballot, but those signatures must be verified by the state. The initiative would reserve most recreational licenses for existing MMJ operators but also provide 26 social equity licenses.
Montana: Two groups have submitted competing adult-use legalization initiatives. The Montana Marijuana Regulation and Taxation Act, submitted by New Approach Montana, appears furthest along but would need to collect 25,468 valid signatures by June 19. New Approach didn’t immediately respond to a request for comment.
Ohio: A group called Regulate Marijuana Like Alcohol is trying to put an adult-use initiative on the November ballot but still needs state Ballot Board and attorney general’s office approval of ballot wording before it can start gathering signatures.
“We haven’t made a decision yet on what our approach will be in light of the virus – but hoping to do that soon,” campaign spokesman and cannabis attorney Tom Haren told MJBizDaily.
The group would need to submit roughly 443,000 valid signatures by July 1, which could be problematic given the coronavirus outbreak.
South Dakota: Separate adult-use and medical cannabis initiatives already have qualified for the November ballot. The state Department of Revenue would determine adult-use licensing, with a mandate to allow enough businesses to drive out the illicit market.
Medical marijuana legalization efforts
Alabama: The state Senate has passed a medical cannabis legalization bill that would license 34 dispensaries, but the measure’s fate in the House is uncertain. At this point, the state is planning to finish its legislative session. The MMJ bill would prohibit smokable flower and edibles.
Kentucky: The state House passed a medical cannabis legalization bill, but it’s unclear what the Senate will do. The Legislature currently remains open for business.
Mississippi: A business-friendly medical marijuana initiative with no license caps has qualified for the November ballot. But lawmakers recently passed a competing measure that’s highly restrictive. The citizen group backing the free-market approach complains that the Legislature is just trying to confuse voters.
Nebraska: Last week, Nebraskans for Medical Marijuana suspended its signature-gathering efforts to put an MMJ initiative on the ballot this fall. The group wrote in a Facebook post that it took the move “out of an abundance of caution,” adding it would “pause” the campaign “until the state indicates it is responsible to continue.”
Jeff Smith can be reached at [email protected]