With eight states passing initiatives in November, cannabis legalization was a big winner in the 2016 election, and that victory bodes extremely well for the movement nationally and the potential to remove some of the major roadblocks for businesses, experts say.
The passage of California’s Proposition 64 opens up the largest cannabis market in the nation — estimated to hit $7 billion in that state alone by 2020. With Nevada voters also approving legalization, the now unified West Coast has vast business opportunities.
Cannabis reform is happening at the perfect time, said Steve DeAngelo, co-founder of the California-based dispensary Harborside.
“Americans desperately need to heal, to learn how to treat each other more gently, to engage in harmonious dialog about our differences — and cannabis is tremendously helpful for all those things,” DeAngelo said.
Meanwhile, recreational legalization in Massachusetts and Maine creates a new foothold for even more opportunities on the East Coast, and medical marijuana approval in Florida, North Dakota and Arkansas pushed the number of states with some form of legal marijuana to 28.
“Clearly this is one of the most significant days in this movement,” Rob Kampia, president of the Marijuana Policy Project, said the day after the election.
He called it the third monumental event for the cannabis industry, behind the elections in 1996, when California legalized medical marijuana, and 2012, when Colorado and Washington legalized recreational cannabis.
“I think the next big day will be the end of federal marijuana prohibition,” Kampia said.
Rep. Earl Blumenauer, an Oregon Democrat active in national legalization efforts, said the massive wins will increase pressure in Congress to approve some sort of banking reform for the cannabis industry and to end the tax burden of IRC Section 280E, which prohibits marijuana-related businesses from deducting their expenses.
“I think it’s all the incentive we’re going to need to push this toward the finish line,” Blumenauer said of the banking efforts, adding that 280E will also get Congressional attention because it’s “unfair — it stifles the industry.”
However, major questions remain about how Donald Trump’s administration will handle legal marijuana, following his surprising victory over Hillary Clinton in the presidential race. Despite the support of anti-cannabis legislators in his campaign, Blumenauer, Kampia and others expect Trump to continue the hands-off policy of the Obama Administration — ceding most authority to states’ rights.
“He’ll be coming into office with more than 50% of the states having some kind of marijuana industry. That’s something we’ve never seen before,” said Aaron Smith, executive director of the National Cannabis Industry Association. “And every time we see a state flip to medical or to adult use, we see more members of Congress moving along to support it.”
Kampia sees it as a positive sign that the Trump campaign didn’t come out with a position on cannabis during the campaign, also indicating the hands-off policy will remain. Back in July, the Republican party voted against including medical marijuana in its platform.
“Positions between Clinton and Trump were relatively similar, saying that we’re going to let the states do what they want … and let the federal government focus on other things,” Kampia said. “If the federal policy is the status quo, then the states will continue moving forward.”
Dave Rheins, president of the Marijuana Business Association, said he has concerns about the roles that New Jersey Governor Chris Christie and former New York Mayor Rudi Giuliani, both hardline cannabis opponents, will play in Trump’s administration. But with the legalization wins, he also thinks the industry has become too large to squash.
“If they’re in the Attorney General’s office, they could wreak all kinds of havoc on the industry,” Rheins said. “(Vice President elect) Mike Pence, an evangelical Catholic, is also anti-drug. I think the lines are drawn, but as an industry I think we’ve reached a tipping point, and that genie isn’t going back in the bottle.”
Blumenauer agreed, and said the big wins for the industry will help bipartisan efforts in Congress move forward with more efforts to help businesses and to end prohibition.
“I think the end is in sight on a variety of different levels,” he said.
Here’s how the elections played out on a state-by-state basis:
- California voters passed Proposition 64, the Adult Use of Marijuana Act, by a margin of 56% percent to 44%. It legalizes marijuana for adults, allows cultivation of industrial hemp, and creates a system to regulate the industry, with a 15% tax on sales. California will be the largest cannabis market in the country, and is expected to be a $7 billion market by the year 2020.
- Massachusetts voters passed Question 4, the Regulation and Taxation of Marijuana Act, by a margin of 54% to 46%. The measure legalizes use, distribution and cultivation of cannabis and creates a system to regulate and tax it.
- Nevada voters passed Question 2, the Nevada Marijuana Legalization Initiative, by a margin of 54% to 46%. The measure sets up a system to regulate and tax marijuana for commercial sales, with a 15% excise tax and a sales tax. Revenues are earmarked for education.
- In Maine, Question 1, the Campaign to Regulate Marijuana Like Alcohol, was leading by a narrow margin of 50.2% to 49.8% with 93% of the vote tallied at the time of this report. The measure will license commercial production and retail sales of cannabis, with a 10% sales tax. It also permits on-site marijuana use at licensed social clubs.
- In Arizona, Proposition 205, the Regulation and Taxation of Marijuana Act, failed by a margin of 52% to 48%. It would have created a system to regulate marijuana, with a 15% tax earmarked for public health and education. Arizona was the lone state that had a marijuana-related initiative fail on election night.
- Florida voters approved Amendment 2, the Use of Marijuana for Debilitating Conditions act, by a margin of 71% to 29%. It changes the state’s restrictive medical marijuana system to look more like that of other medical marijuana states. The amendment expands the former law, which only allowed low-THC cannabis varieties, to include access to high-THC cannabis varieties, allows more qualifying medical conditions and lets patients smoke rather than just consume orally. It also gives medical marijuana an important foothold in the South. Many industry experts consider it the second most important ballot of the election, as it provides medical marijuana access to a state with nearly 20 million residents.
- North Dakota voters approved Measure 5, the North Dakota Compassionate Care Act 2016, by a margin of 64% to 36%. The measure allows patients with debilitating conditions to get medical cannabis and establishes a licensed system of Compassionate Care Centers.
- Arkansas voters passed Issue 6, the Arkansas Medical Cannabis Act, by a margin of 53% to 47%. It will regulate the use of medical marijuana by qualified patients, while creating eight licensed grow operations.
- In Montana, Initiative 182, the Montana Medical Marijuana Initiative, passed by a margin of 57% to 43%. It expands state medical marijuana laws — essentially rolling them back to a prior, less restrictive system — and repeals the limit of three patients per provider.