Which States Legalize Next? Finding Fertile Ground for Cannabis Investment

While the legal cannabis industry has already taken off in North America, reaping $10 billion in sales through 2017, there’s still plenty of room for it to grow. At the start of last year, the cannabis black market still represented 87 percent of all sales on the continent. However, that market share is declining as more and more states create legal, regulated cannabis industries. Today, eight states plus D.C. have fully legalized marijuana for adult possession and consumption, while 29 states plus D.C. maintain a legal medical marijuana policy.

While the federal government has signaled something between skepticism and hostility toward legalizing cannabis, it has done little to stop the states that see both the economic and social benefits of adopting legal marijuana programs. Although Attorney General Jeff Sessions rescinded the Cole Memorandum – the legal memo that advised federal prosecutors to avoid pursuing cannabis businesses operating in accordance with state laws – that hasn’t stopped more states from considering legalization. These nine states are likely to move forward with cannabis legalization efforts of their own in 2018.

Adult-use cannabis initiatives

Vermont

Vermont has already adopted an adult-use cannabis law. Governor Phil Scott (R) signed legislation legalizing adult use of marijuana into law in January, making Vermont the first state to legalize through its legislature rather than a voter initiative.

Vermont’s law, which is set to take effect July 1, 2018, allows people 21 years and older to possess up to one ounce of marijuana, as well as grow up to two mature and four immature cannabis plants at any given time. However, it is worth noting that commercial cannabis sales are NOT allowed under Vermont’s legislation, restricting legal cannabis to personal cultivation, possession, and use.

New Jersey

New Jersey could possibly become the second state to legalize recreational cannabis through its legislature. The Democratic majority in the state’s legislative branch is rallying behind newly-elected Governor Phil Murphy (D), who made legalizing marijuana a central aspect of his campaign.

Since Murphy’s inauguration, two bills have been introduced in Trenton that would do just that. The first was introduced in the state Senate by Sen. Nicholas Scutari, and the second followed in the Assembly shortly after, introduced by Asm. Reed Gusciora. In addition to legalization efforts in the state, Murphy announced a vast expansion of the New Jersey’s medical marijuana program, which now includes more qualifying conditions.

Connecticut

Connecticut’s legislature is reportedly revisiting the issue of legalization. Connecticut’s legislature shot down a legalization bill last year, but lawmakers in support of legalization say they don’t want Connecticut to be left behind. Legislators are concerned that Connecticut’s residents will purchase cannabis in Massachusetts and simply return home, where cannabis has already been decriminalized. Instead, they argue, legalization in Connecticut would keep those dollars in the state’s own economy. An October 2017 poll conducted by Sacred Heart University found that residents agree; 71 percent of Connecticut adults support legalizing cannabis.

There are two bills aimed at setting up an adult-use marijuana program that would legalize possession and sale of cannabis to people 21 years of age and older. One bill is currently before the state’s General Law Committee and the other was passed by the Judiciary Committee on April 5. The bill currently before the Judiciary Committee includes a provision that would allow the cultivation of up to six cannabis plants for personal use.

Rhode Island

Like Connecticut, a recent Rhode Island legalization bill failed in the legislature last year, but state legislators’ heads turned after Massachusetts legalized. Using an “incremental legalization” approach, lawmakers are aiming at immediately legalizing the possession of up to an ounce of marijuana for adults 21 years of age and older.

Concurrently, the proposal, introduced by state Senator Joshua Miller and Representative Scott Slater, would establish a six-person advisory panel that would develop recommendations on how to create and regulate a fully legal retail environment down the road. While Rhode Island wouldn’t permit cannabis sales immediately, it would expand neighboring Massachusetts’ potential consumer base. Rhode Island’s Governor, Gina Raimondo, has not expressed opposition to legalization, emphasizing that it seems to be the direction the country as a whole seems to be moving.

Michigan

Thanks to 365,000 supporters who signed a petition last year, Michigan residents might be able to vote on a ballot measure to legalize cannabis come November. When Michigan voters go to the polls for midterm elections, it’s quite possible they could also be deciding the future of their states’ marijuana policy.

If the measure is placed on the ballot as is, the proposal would permit people 21 years and older to possess up to 2.5 ounces of marijuana, as well as grow up to a dozen plants in their homes. Cannabis sales would be subject to the 6 percent state sales tax, as well as an additional 10 percent excise tax. If passed, Michigan would be the first Midwestern state to legalize adult use cannabis.

Medical marijuana initiatives

Oklahoma

Oklahoma’s State Question 788 is slated to be on the ballot for voters to consider as an “initiated state statute” on June 26, 2018. If passed, eligible patients would be able to receive a state-issued medical license to possess up to three ounces of marijuana on their person, as well as up to eight ounces in their home. There would be a 7 percent sales tax on cannabis products, with revenue earmarked for administrative costs, education, and drug and alcohol rehabilitation. The measure would also prohibit municipalities from using zoning laws to prevent the establishment of marijuana dispensaries.

Utah

The Beehive State’s conservative reputation makes the push for legal medical marijuana an interesting prospect to watch.

Utah is considering a referendum to legalize medical marijuana, which might appear as an initiated state statute on November 6, 2018. A poll published in The Salt Lake Tribune in October found that 75 percent of Utah residents support legal medical marijuana and several patient and caregiver activist groups support the measure.

Like Oklahoma, if adopted, the Utah measure would allow for the licensing of marijuana cultivation facilities, processing facilities, testing labs, and dispensaries. Medical cards would start being issued to eligible patients in March 2020.

Initially, card-carrying patients would be permitted to purchase up to two ounces of unprocessed marijuana in any 14-day period, or any cannabis product with no more than 10 grams of the psychoactive compound THC. By January 2021, medical patients would be allowed to grow up to six plants for personal use within their homes, but only if there is no dispensary within 100 miles. Medical marijuana in Utah would be exempt from the state sales tax.

Missouri

Missouri is considering legislation that would legalize medical marijuana, but only for patients with pervasive conditions. Under the proposed law, the state’s Department of Health and Senior Services would be authorized to issue medical cannabis registration cards to any state resident 18 years of age or older who can provide a signed doctor’s statement demonstrating they suffer from epilepsy or an irreversible debilitating disease. Introduced by Rep. Jim Neely (R), the legislation would allow card-carrying patients to possess up to 20 ounces of medical cannabis, with the option to apply for a waiver of that limit as well.

South Dakota

South Dakota’s medical marijuana initiative also comes in the form of a ballot measure, and will possibly be up for consideration as an initiated state statute on November 6, 2018. The referendum was triggered after supporters submitted 15,000 signatures last year; so long as 13,871 of those signatures are deemed “valid,” the ballot measure will move forward to a vote.

South Dakota’s medical marijuana program, if adopted, would be limited to certain “debilitating medical conditions,” which would include cancer, glaucoma, HIV/AIDS, epilepsy, hepatitis C, Crohn’s disease, Alzheimer’s disease, PTSD, and other conditions. Any resident of South Dakota would be permitted to petition the Department of Health to add a serious medical condition to the list and the department would be required to respond within 180 days.

Continued, consistent cannabis industry growth in the U.S.

As we can see, Attorney General Jeff Sessions’ move to revoke the Cole memo has certainly not slowed down cannabis industry growth. Significant movements and developments in these nine states can be seen as strong indicators that the cannabis industry’s growth is continuing unabated.

For those investing in the cannabis industry, the growth of marijuana programs in new markets should come as an encouraging sign that the industry’s big numbers will keep on growing. While we are not yet in the post-prohibition era, the cannabis industry is shaking off old shackles, showing promising signs of growth from coast to coast.