Key cannabis legalization wins could bring in upwards of $2 billion in new sales

(This story has been updated to reflect news that Utah voters approved medical marijuana and that Connecticut also elected a governor who favors marijuana.) 

Marijuana scored a sweeping victory at the ballot box on Tuesday, with voters approving new markets in Michigan, Missouri and Utah that eventually could generate $2 billion in medical and recreational sales.

Across the nation, voters installed the Democrats as the new majority party in the U.S. House of Representatives, improving the odds that lawmakers will pass federal marijuana reforms that benefit MJ businesses.

Cannabis-friendly gubernatorial candidates, meanwhile, won in California, Colorado, Connecticut, Illinois, Michigan, New Mexico and New York.

“Voters have once again sent a message loud and clear that it is time to legalize and regulate marijuana,” said Steve Hawkins, executive director of Washington DC-based Marijuana Policy Project.

A recreational ballot measure in North Dakota was the only marijuana initiative that voters rejected.

Here are five notable takeaways from 2018’s midterm elections:

1. In Michigan, passage of rec MJ paves the way for a potential $1.7 billion market

Michigan would be the ninth U.S. state to establish a full-fledged adult-use cannabis program that permits commercial cultivation and sales and the first in the Midwest.

Marijuana Business Daily projects annual sales in Michigan could reach $1.4 billion-$1.7 billion within several years of launch.

In addition to Michigan’s status as a large market, the state could create a domino effect in the Midwest, said Kris Krane, president and co-founder of 4Front Ventures, a multistate cannabis operator.

“(This) should pave the way for other states to follow suit, likely starting with Illinois through the state Legislature as soon as next year,” Krane wrote in an email to MJBizDaily.

2. Federal reform efforts may get a boost, boding well for business

The House flipping and “the success of more ballot initiatives makes a (federal marijuana) deal all that more possible, though it really depends on what President Trump wants,” Douglas Berman, an Ohio State University law professor, wrote in an email to MJBizDaily.

But what kind of reform?

According to Rob Kampia, executive director of the Marijuana Leadership Campaign, the cannabis lobbying community needs to agree on what it wants:

  • A comprehensive bill protecting all state-legal marijuana business such as the States Act?
  • Legislation that legalizes medical marijuana?
  • Or stand-alone bills that address such vexing issues as taxation and banking?

Many in the industry, such as the Cannabis Trade Federation, are pushing for the bipartisan States Act, which would amend the federal Controlled Substances Act to allow each state to determine its own marijuana policies.

The bill, in effect, also would allow state-legal businesses to enjoy the same banking arrangements and tax benefits as any legal business in the United States.

3. Federal marijuana reform still could be stymied

The path to federal marijuana reform – and new opportunities for cannabis entrepreneurs – would have been a lot easier if both the House and the Senate had flipped to Democrats. Republicans maintained control of the Senate.

Kampia said marijuana reform faces obstacles, in addition to the industry unifying in support of a particular measure:

  • Marijuana policy is a low congressional priority when compared to immigration, tariffs and Syria.
  • Congress must pass 12 annual spending bills by September, and this will dominate the discourse every single month.

Berman, the law professor, recently cautioned: “It’s the people in leadership who have the power … and whether they want this to get done sooner or later.”

That includes, he said, Sen. Majority Leader Mitch McConnell and President Trump, who has said he would “probably” support the States Act.

4. Missouri voters embrace a business-friendly medical marijuana initiative

Missouri voters approved Amendment 2, which could lead to $175 million-$275 million in annual MMJ sales within several years of the state’s first dispensary opening, according to MJBizDaily projections.

Missouri voters, however, rejected two other MMJ ballot measures.

Diane Czarkowski, founding partner of Canna Advisors, a Colorado-based marijuana consulting firm, considered Amendment 2 the most favorable for businesses.

It calls, she noted, for no fewer than 60 cultivation, 80 processing and 192 dispensary licenses based on Missouri’s population. The measure also provides for physician discretion in recommending MMJ. And it would impose a relatively low tax rate of 4%.

“It also really holds the state to issuing the applications within a certain amount of time – the very latest for licensing would be December of next year,” Czarkowski said. “All too often we’ve seen states stall out in putting together a plan.”

5. Key pro-marijuana gubernatorial candidates won

In Illinois, Democrat J.B. Pritzker, who advocated for adult-use marijuana legalization as part of his platform, handily beat incumbent Gov. Bruce Rauner.

Charlie Bachtell, CEO of Chicago-based, multistate marijuana operator Cresco Labs, said Pritzker’s victory “should result in legalization in Illinois.”

However, it will take a while.

“That still has to pass in the next legislative session, and then you have regulatory development that has to take place,” Bachtell noted.

As expected, Gov. Andrew Cuomo won a third term as governor of New York. Cuomo has warmed to marijuana, and state lawmakers are seriously considering legalizing adult-use marijuana.

But there were losses, too.

In Florida, another potentially huge market, Democrat Andrew Gillum, who supports adult-use MJ, lost to Republican Ron DeSantis, who has expressed concerns about cannabis.

Jeff Smith can be reached at [email protected]

Kate Lavin and Joey Peña contributed to this report.

8 comments on “Key cannabis legalization wins could bring in upwards of $2 billion in new sales
  1. Joseph GiustoJo on

    The issue of legislation of marijuana shouldn’t have a political division, marijuana is a medicinal herb that has been lied about since the logging industry stigmatized it in the 1920’s. It’s a matter of basic human rights that an adult should have the freedom of choice. It is not a dangerous drug or narcotic. I believe God put it here for all to use. Tax it and get rid of the National Deficit!

    Reply
    • Shane Wang on

      absolutely. I’m sure republicans are crying this morning after losing the house of representatives. until they realize that the majority of the united states supports legalization of marijuana in one form or another, they will only represent the the lesser vote.
      I am neither republican or democrat, I am a patriot, and I do not feel represented by either party nor do I believe they have ever had the best interest or the will of the people in mind.

      Reply
  2. Rich H on

    Why can’t the industry unite around one goal.

    Make it “unscheduled”; that solves all the state Federal conflicts. Let the states control it as they see fit. There is no logical argument for Schedule I, make them defend it like idiots or change it.

    I’d like to see them regulate marijuana like they regulate tomatoes.

    Reply
  3. The mad Yooper on

    I personally don’t think it is wise to create a political divide that doesn’t already exist . We have friends on both sides of the aisle.
    For example Mitch Mcconnell Is responsible for the hemp farming act of 2018, deschedulizing hemp.
    Dana Rohrabacher was defeated now what will happen to our shield, The Rohrabacher amendment that will expire the first of the year.

    Please let’s not make any enemies.

    Reply
  4. Kelly on

    What will happen to the medical marijuana program? I’d assume the state would want to keep this revenue. Will they offer some type of tax break for those who still have their card? Or are the mmp cards now null and void?

    Reply

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