Election Day 2018 marked another resounding victory for cannabis.
At least 36 different ballot measures and elective offices across the country were in play.
From coast to coast, candidates from both parties who are on the record as favoring some form of marijuana reform were returned to office or swept into congressional delegations, state houses, and local assemblies. These are the folks who can help move reform efforts along all over the country.
More importantly, voters in each of the three states with the most important legalization efforts (all three of which were carried by the Trump campaign in 2016, by the way) passed their referendum questions.
This isn’t really a surprise – we knew going into Nov. 6 that 66% of Americans favor the legalization of cannabis for recreational use, and more than 90% want it to be legal for medical application.
Still, the results are big news for cannabis investors – and a flashing green light to folks who may yet be sitting cautiously on the sidelines.
That’s because there are major benefits to adding one of the largest states by adult population, and one of the reddest “red states” to the pro-cannabis bandwagon.
Let’s take a look…
Red States Rush to Cannabis Green
Utah and Missouri voters approved medical cannabis measures, while Michigan joined the ranks of states with full legalization. Whether for medical healing power with reduced risk of addiction versus opioids, or economic opportunity, or simply personal freedoms, voters in huge numbers found something on which to hang their hats.
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The biggest news was in Utah. Utah voters passed Proposition 2, creating a medical cannabis regime in the state. The Utah change is not going to move the needle in a massive way. After all, the illicit market in Utah is fairly small.
It’s such a big deal because of what the positive vote represents. Utah is among the most conservative of states, particularly when it comes to “sin” products. Its liquor laws are among the most restrictive in the country, and it taxes alcohol at a high rate. Utah also has the lowest smoking rate in the United States.
So, the realization among voters and the legislature of the health benefits of cannabis is a big win. What’s more, The Salt Lake Tribune reports that one in five voters was motivated to go to the polls specifically because of the cannabis proposition.
In Michigan, voters legalized cannabis for recreational use by a wide margin when they approved Proposal 1. That makes it the tenth state where it is legal for all adults to consume cannabis – it is also recreationally legal in Washington, D.C.
Up to 7.3 million adults will be eligible to purchase cannabis once the program is rolled out. Estimated sales could reach $1 billion annually, according to the Detroit Free Press.
It’s also worth noting that Michigan’s law would provide for the lowest taxes for recreational cannabis in the country.
Finally, deep-red Missouri approved its Amendment 2 by a wide margin. Amendment 2 creates a medical cannabis framework for the first time in Missouri. This new market increased the total value of cannabis in the United States by approximately $600 million per year.
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Importantly, Amendment 2 was the least restrictive of the three cannabis-related questions on Missouri’s ballot.
This is a fantastic electoral result for cannabis, but there was one small disappointment in North Dakota.
But some perspective is in order: The Roughrider State isn’t a big market – or one that matters all that much for our purposes. The North Dakota statutory language included some odd provisions that deviated from other successful recreational cannabis programs in the country. Those provisions hurt the chances for passage.
But with such a tiny population and correspondingly small illicit market, the failure is a non-event in the context of the much bigger changes in other states.
And we absolutely have to consider developments at the federal level…
The Race to Make the Next Wave of Cannabis Market Expansion
Nationally, there are several bills before Congress designed to relax the federal restrictions on cannabis and related hemp products.
These efforts include the full normalization of hemp as a cash crop, removing restrictions on Veterans Administration doctors discussing cannabis-based treatment with their patients, easing antiquated banking restrictions, and increasing research.
There are more than 70 cannabis-related proposals between the U.S. House of Representatives and Senate. And an incoming Democratic majority in the House creates an opportunity.
Voters are starting to tire of partisan-based gridlock in many areas. And this divided government will look for bipartisan bills to prove to the people that the government can still get things done as the new Congress gets seated.
Of course, there’s much more action to come on the state level, too – and it will hit long before the next election. As Vermont and West Virginia have proven, states don’t necessarily wait around anymore for the voters to put a legalized cannabis program into action.
New Jersey has been working hard to legalize recreational cannabis before the end of the year -and importantly, before New York does it – to attract the dollars of local customers, tourists, and investors.
(Note: I’m going to get deeper into that next week in our free Cannabis Profits Daily research service. Go ahead and click here to subscribe. Again, it’s completely free of charge.)
The key takeaway from this monumental election is that legal cannabis’ momentum is now all but totally unstoppable.
The considerable profits we’ve seen up to now really are just the start of something much, much bigger.
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