New medical and recreational marijuana markets in four states ultimately could generate more than $2 billion in combined sales – provided voters pass legalization ballot initiatives on Nov. 6, according to a Marijuana Business Daily projection.
The MJBizDaily forecast, in particular, predicts new cannabis programs in Michigan, Missouri, North Dakota and Utah would generate a combined $1.66 billion-$2.08 billion in annual sales within several years of launching.
Successful state ballot initiatives also could exert more pressure on the U.S. Congress to reform federal marijuana laws so they are more friendly to MJ businesses, industry experts said.
“All of this is just building the momentum” toward inevitable reform, said Douglas Berman, an Ohio State University law professor who follows and writes about the marijuana industry.
One of the most closely watched federal bills, for example, is the STATES (Strengthening the Tenth Amendment Through Entrusting States) Act, which would amend the U.S. Controlled Substances Act to allow each state to determine its own marijuana policies.
What to watch Nov. 6
Eyes are fixed especially on Michigan, which is voting on recreational marijuana.
Adult-use cannabis in Michigan alone is projected to generate $1.4 billion-$1.7 billion in annual sales within several years of retail stores opening, according to the MJBizDaily forecast.
“Michigan is a particularly important campaign this year given that it would be the first state in the Midwest to abandon the failure of prohibition,” MPP Deputy Director Matt Schweich said.
North Dakota voters also are weighing in on adult-use cannabis, while Missouri residents are voting on three medical marijuana initiatives that would generate a projected $175 million-$275 million annual market there within several years of dispensaries opening, according to MJBizDaily.
Utah has a medical marijuana initiative on tap, but backers and opponents, including the Mormon Church, recently agreed on a more restrictive compromise measure for state legislative action.
That measure is still being tinkered with, and some activists who believe the compromise is weak say that passing the voter initiative is still important to put pressure on the Utah Legislature to develop MMJ regulations that are more favorable to patients – and thus toward cannabis businesses.
North Dakota, a decidedly red state that didn’t legalize medical marijuana until 2016, may hold significance beyond its small market size.
“I would predict that North Dakota won’t pass (adult-use marijuana),” Berman said. But if it does, he added, it would be “an incredibly remarkable signal of just how much the politics have shifted there” in just two years.
North Dakota is in the process of launching a modest medical marijuana market with a goal of having eight dispensaries statewide by next June. A rec MJ market would generate $65 million-$75 million in annual sales within several years of the first store opening, according to MJBizDaily.
With Nov. 6 looming, here’s a snapshot of cannabis-related state ballot initiatives. All annual sales referenced are MJBizDaily projections.
1. Michigan: Michigan Marijuana Legalization, led by the Coalition to Regulate Marijuana Like Alcohol (Michigan Proposal 1)
What it would do: Legalize marijuana for adult use.
Projected annual sales: $1.4 billion-$1.7 billion.
Key business highlights:
- Excise tax of 10% on retail and microbusiness sales (in addition to existing taxes).
- Municipalities would be allowed to ban or limit marijuana businesses within their boundaries.
Latest polls: Initiative ahead by a double-digit margin.
What they would do: Legalize medical marijuana.
Projected annual sales: $175 million-$275 million.
Key business highlights:
- Proposition C (statutory amendment): 2% retail sales tax. Revenue would go to veterans, drug treatment, early childhood education and public safety.
- Amendment 2 (constitutional amendment): 4% retail sales tax. Only initiative that would allow home cultivation. Physicians would have more latitude in recommending MMJ to patients. Revenue in excess of the cost to regulate the system would help cover veterans’ health-care costs.
- Amendment 3 (constitutional amendment): 15% retail sales tax, plus a wholesale tax of $9.25 per ounce of flower and $2.75 per ounce of leaves. Revenues would fund a state medical research institute.
Latest polling: Multiple initiatives look poised to pass.
Voters can vote for more than one initiative. Generally, the amendment that gets the most votes takes precedence, with constitutional amendments overruling statutory ones. But legal experts said the outcome might be challenged and have to be hashed out in courts.
3. North Dakota: Marijuana Legalization and Automatic Expungement Initiative (Measure 3, sponsored by Legalize ND)
What it would do: Legalize adult-use marijuana.
Projected annual sales: $65 million-$75 million.
Key business highlights:
- The measure doesn’t spell out specifics, other than to remove hashish, marijuana and THC from the list of Schedule 1 controlled substances.
- It also would amend the definition of drug paraphernalia so the equipment to cultivate and use marijuana would be considered legal.
Latest polling: Survey results are mixed. A poll conducted by the initiative backer shows strong support, while a poll conducted by an independent firm shows strong opposition.
4. Utah: The Medical Cannabis Act, a voter initiative led by the Utah Patients Coalition.
What it would do: Legalize medical marijuana.
Projected annual sales: $15 million-$25 million.
Key business highlights of a compromise measure that would be voted on by legislature:
- Initially limit the number of dispensaries, called pharmacies, to five statewide, with a licensed pharmacist at each. The initiative, by contrast, would provide for up to one dispensary per 150,000 residents, or as many as 20 based on Utah’s population.
- Establish a single, state-owned central pharmacy that would supply health departments with MMJ products with certain dosage limits.
- Permit sales of unprocessed marijuana flower only if packaged in a blister pack in which each blister contains no more than 1 gram.
- Ban home cultivation.
Latest polling: Too close to call, but support for the initiative has been slipping since the compromise was reached.
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