Cannabis on the Ballot - 2020 Marijuana Elections Update
2020 has been a year of challenges for most industries, cannabis included. But there have been a few bright spots.
First, cannabis businesses in both adult-use and medical markets were deemed “essential” and have nimbly adapted to social distancing guidelines with record sales figures in many markets.
There is also significant hope for the future, with collective energy behind adult-use cannabis ballot initiatives in 4 states: Arizona, Montana, New Jersey, and South Dakota. In fact, earlier this week the secretaries of state for Arizona and Montana, announced that the Smart and Safe Arizona and New Approach Montana initiatives had officially qualified for November’s ballots. Moreover, there is cautious optimism over the prospect for a legislative victory as well, with discussions over a new regulated market in Vermont ongoing.
Now, nothing can be assured for a November election in August. Nonetheless, there is reason to believe that cannabis reform momentum could carry the day in multiple states. And every market that legalizes only increases the drumbeat and pressure for federal reform.
Arizona
The Grand Canyon State is already home to a robust medical cannabis market that serves as home base for notable multi-state operators and popular brands. And if polling numbers hold, Arizona’s market will soon expand to adult-use as well. After a narrow defeat for an adult-use legalization initiative in 2016, Arizonans are on track to adopt adult-use with recent polling showing 62% of likely voters in support of Smart and Safe.
Under Smart and Safe, the Arizona Department of Health would be the lead regulatory agency tasked with crafting and administering adult-use cannabis regulations. The initiative also includes multiple social justice provisions to facilitate expungements for certain prior cannabis convictions and a social equity ownership program.
Montana
Big Sky Country will make national news if voters approve the New Approach Montana initiative this coming November. After a vigorous effort to collect over 50,000 signatures to get on the ballot, New Approach would vest licensing and regulatory authority to the Department of Revenue, assess a 20% retail tax on adult-use products, and open an application process as soon as Oct. 1, 2021. Though relatively sparsely polled, at least some data suggests the measure may have sufficient public support. Of course, those numbers may shift significantly as the election draws closer.
New Jersey
New Jersey has been a center of focus for adult-use cannabis activists and entrepreneurs alike—as much for its own potential market size as the likely repercussions of legalization as a bellwether event for the Northeast. It is widely anticipated that neighboring states, such as New York and Pennsylvania will be spurred to accelerate their own plans regarding adult-use cannabis markets when facing potential lost tax revenues and job creation opportunities from a state that is a mere commuter rail ride away. Of course, any acceleration in those markets will have further ripple effects as well.
After efforts to legalize adult-use cannabis legislatively with strong public support failed to lead to a deal, New Jersey elected officials chose to put the decision in the hands of New Jerseyans without the need of a grassroots signature drive. And, as in Arizona, recent polling numbers show well over 60% of New Jersey voters in support of the legalization initiative. As a procedural matter, the New Jersey ballot measure would amend the state constitution to legalize cannabis for those 21+ and would direct the state’s medical market regulators to oversee the newly created market.
South Dakota
In a sign of national shift on cannabis, South Dakota will become the first state to simultaneously vote on separate medical and adult-use initiatives. Similar to Montana, the state Department of Revenue would take regulatory control of an adult-use cannabis market and impose a tax on cannabis sales (here, 15%). One element of the South Dakota initiative that those who closely follow hemp legislation may find interesting—the constitutional amendment would not serve to legalize hemp, but would require the South Dakota Legislature to pass laws regulating hemp cultivation, processing, and sales.
Vermont
Although Vermont legalized possession of up to an ounce of cannabis and cultivation of up to two plants in 2018, the state has yet to put into place a regulatory scheme governing legal sales of the plant and its derivatives within the state. But that soon may change. Bills that would serve to regulate and tax commercial cannabis activity have cleared both the Vermont Senate and House and are working their way through the legislative reconciliation process before being sent to Governor Phil Scott.
The cannabis industry has already proven itself to be a significant contributor of tax income to state coffers as well as a dynamic job creation and economic development engine. While some may have sought to score cheap political points when commercial cannabis activity was deemed “essential,” the COVID-19 pandemic has shown reluctant politicians (and their constituents alike) that cannabis can be a crucial tool towards rebuilding local economies.
Come November 3, there is reason for optimism that even more markets will be on track to open for regulated, taxed, and tested adult-use marijuana.