On Tuesday, four states, Arizona, Montana, New Jersey, and South Dakota will vote on legalizing recreational cannabis. Mississippi will be considering medical cannabis use. Most voters are in favor – and their approval could convince neighboring states to move towards legalization as well.
Cannabis on the ballot is getting people “engaged, energized and involved,” said Bridget Hennessy, Vice President of Government Relations at industry analyst Weedmaps. “Cannabis voters are out in force.”
Support for legal use has been growing over the past decade and now is “broad and wide,” she said.
That enthusiasm has inspired donations toward the goal of legalization. A Marijuana Business Daily analysis reported that legalization measures in Arizona, Mississippi, Montana, New Jersey and South Dakota raised about $20 million.
That’s a significant increase from four years ago. “Proponents of state ballot measures have outraised opponents this election season by almost 36-to-1,” said Marijuana Business Daily’s Andrew Long, “a massive increase from four years ago when advocates outstripped the opposition by only 4-to-1,”
The pandemic has added a new reason to decriminalize the substance – the need for additional tax revenues. “Covid-19 has decimated state and local government budgets,” said Hennessy, “legalizing cannabis can help generate much needed revenue,” for things like better roads and schools. Decriminalizing the substance will also shift police and court systems’ spending to more serious crime prevention and response.
Each state’s decision could also affect its neighbors. If New Jersey approves legal use, it’s likely to spur other East Coast states, especially Pennsylvania and New York to move in that direction too, according to Max Meade, cannabis insurance adviser for Brown & Brown Insurance. New Jersey’s neighbors “will not want to risk losing out on a growing revenue stream, especially since COVID-19 negatively impacted many states’ revenues,” he said.
All five ballot measures are expected to pass said Mark Alderman who advises clients in the cannabis industry as chairman of the Cozen O’Connor Public Strategies group. “This will put more pressure on Washington to fix the disharmony between state and federal law,” he said. Because the substance is still illegal federally, cannabis entrepreneurs can’t write off typical business expenses, lack banking resources like loans and marijuana businesses often end up paying taxes in cash.
No matter the outcome on Tuesday, the industry is projected to keep growing. Even in the pandemic, cannabis is squarely succeeding. 2020 sales of legal marijuana are projected to reach $14.8 billion according to Weedmaps. That’s a 21% growth from 2019 in a year when revenue from other recreational industries have cratered.