The biggest changes coming to the cannabis industry after the 2018 election
The 2018 election cycle brought quite a few positive changes to the cannabis industry in the United States. We saw three of the four major ballot initiatives regarding cannabis pass with strong support. The only ballot initiative that did not pass this election cycle was the adult-use vote in North Dakota with only 40.5% of the population voted yes and 59.5% voted no. The three other initiatives from Michigan, Utah, and Missouri did pass as citizens in those states decided they were indeed tired of a failed prohibition policy for cannabis. Furthermore, there were a host of local elections which were held to support cannabis policy across the country. Finally, we’ve even seen positive movements from the federal government since the 2018 midterms ended. We’ll dive in and outline these changes and present the immense opportunities many of this new regulations will bring to the cannabis industry.
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Michigan Legalizes Adult-Use Cannabis
The state of Michigan passed adult-use cannabis in 2018 with a vote of 55% for and 45% against. It’s estimated that the state of Michigan’s cannabis markets will be worth $1.3 billion by the year 2021. This is a decent jump from the current numbers of around $600 million which is generated from the state’s medical marijuana program. The state of Michigan is ripe with cannabis business opportunities after the legalization vote passed. WIth projections to more than double in size over the next few years, the Michigan market seems perfect for would be business owners to look at. The market has done extremely well as a medical marijuana program and a similar expectation is in place for the future of their adult usage cannabis market as well.
Furthermore, the state of Michigan has become the first Midwestern state to legalize cannabis. Due to the conservative nature of the Midwest, it’s been seen as a positive sign for the cannabis movement as a whole. The cannabis industry seems to be moving along faster than most expected, despite the federal ban on cannabis still in effect. Many states are realizing the ‘cat is out of the bag’ for the cannabis sector and those who act now can help their citizens and specifically local business owners garnish a first mover advantage. While the market in Michigan will face challenges such as cash-only operations, these are not unique to the Michigan market and many entrepreneurs in other states have led by example to solve these problems.
Medical Marijuana in Utah
Utah, a traditionally more conservative state also passes exciting cannabis reform laws in the 2018 election cycle. The vote came down to the wire with a 52% to 48% victory to legalize the medicinal use of cannabis in Utah. With the passage of the vote, the state Department of Health will have to develop rules for their medical marijuana program. This usually takes a state a decent amount of time since all of the regulatory aspects of the industry have to be created nearly from scratch. Patients should not expect to be able to access the medical marijuana program in Utah until 2020.
Similar to Michigan legalizing cannabis for adult-use, Utah shares a similar reputation for being too conservative in nature for cannabis legalization policies. Yet, it’s a positive sign to see this change come from the deep red and religious state of Utah. Even though it’s simply medical marijuana which was voted upon in Utah, this is still a huge step in the right direction for the for this traditionally conservative and western state. Hopefully, other states with a similar disposition in the region such as Idaho and Wyoming can take note and put an end to their cannabis prohibition programs.
Medical Marijuana in Missouri
Another Midwestern state to implement medical marijuana laws, Missouri passed their ballot initiative with a strong 65% vote for medical marijuana. The state of Missouri interestingly had multiple ballot initiatives regarding medical marijuana to decide upon. Luckily, the residents of Missouri passed just one of these initiatives as there was a small chance for multiple ballot initiatives regarding cannabis to be passed which would have contradicted one another, leading to a constitutional crisis for cannabis in Missouri. Now though, the state legislature will have the obligation to develop and implement medical marijuana regulations. The state legislature has until June to complete the rule-making process and then businesses will be able to apply for a Missouri operational cannabis license. It will still take a few months for the licensing process to be completed and for businesses to complete their build-outs to produce cannabis on a regular basis. Potential medical marijuana patients shouldn’t expect the Missouri program to officially start sales of cannabis until 2020.
Other Smaller Elections
There were a couple states with extra and smaller ballot initiatives regarding cannabis. First, the state of California saw a large jump in cannabis ballot initiatives since they state legalized cannabis for adult use last year. Of these many programs, over 85% of their local ballot initiatives passed. These were mostly local ballot measures to allow for new cannabis markets across the Golden State of California. Of the 109 initiatives, 94 were passed and only 15 defeated. This may be due to the tax increases localities can receive with cannabis sales. Furthermore, the extra business opportunity within legalized cannabis markets presents a strong value proposition for communities.
Another example from Colorado also had a marijuana-related ballot initiative which was aimed at unifying the definition of hemp with federal laws. In case the federal government makes a move to legalize the plant this year it will allow Colorado to quickly adopt new regulations for hemp. The amendment did pass with a Yes vote receiving support from 60.5% of the vote against only 39.5% against it. The amendment will officially update the definition of “industrial hemp” within the Colorado Constitution to now match federal laws regarding hemp. The hope with this change, again, is to be prepared when the federal government does open up cannabis regulations from their current prohibited state.
With the firing of the Attorney General, Jeff Sessions, many within the cannabis industry cheered his departure. He had previously talked about his view on cannabis being extremely outdated, negative, and full of “reefer madness” fallacies about the cannabis plant. He famously repealed many of the federal safeguards put in place by the former admonition regarding cannabis consumption. Specifically, he attacked the Cole memo which was repealed under his guidance. Now that Jeff Sessions has been removed as the country’s top legal authority, many public cannabis companies saw a large jump in price. Furthermore, although it is still speculation, there are strong signs to show the federal government may legalize cannabis in the next couple of years. With over 60% of American voters supporting cannabis legalization, there are huge political benefits which could come to the political party that legalizes cannabis at the federal level.
In closing, 2018 will be remembered as an extremely positive year for the cannabis industry as a whole. Although it was earlier in the summer of 2018, we also saw the Midwestern state of Oklahoma pass medical marijuana legislation through a ballot initiative. Furthermore, the federal government slowly but surely has been changing regulations regarding cannabis such as opening it up for more research. All and all, the cannabis industry as a whole seems to be moving faster along its path of legalization than anyone could have forecasted which is a great sign for cannabis industry operators and consumers.