ALEXANDRIA, Va.—This year, several states have adult-use legalization initiatives on their November ballots, and proponents say permitting recreational use of the product would generate more tax revenue and create jobs, reports CNBC.
New Jersey is expected to approve a ballot initiative to legalize adult-use marijuana next month, a move that would generate up to $400 million in adult-use sales in its first year and $950 million by 2024, translating to nearly $63 million in annual state tax revenue and an additional $19 million in local taxes, according to Marijuana Business Daily.
Legalization proponents are hoping New Jersey’s pro-cannabis vote will trigger a domino effect in neighboring states. “Once New Jersey goes, it’s going to set off an arms race along the East Coast, putting New York, Connecticut and Pennsylvania on the clock,” said DeVaughn Ward, senior legislative counsel for the Marijuana Policy Project, a cannabis advocacy group.
Those three states already allow medicinal marijuana sales and have been moving toward legalizing adult-use for several years. Three additional states—Arizona, South Dakota and Montana—have adult-use legalization initiatives on their November ballots, and Mississippians will vote on a bill allowing medicinal sales. If all five measures pass, medicinal marijuana will be legal in 38 states, plus Washington, D.C., and Puerto Rico, and adult-use in 14 of those, plus D.C.
During the stressful pandemic, marijuana sales increased, and the prospects for continued growth are high. Total cannabis sales in the U.S. this year are projected to reach $15.8 billion, according to Arcview Market Research/BDSA, up from $12.1 billion in 2019. In Illinois where sales are legal, the marijuana business has been growing for five straight months and hit $67 million in September. Oregon has seen adult-use sales rise 30% above forecast since the pandemic began, averaging $100 million a month over the summer.
“As a whole, the industry is doing fairly well,” said Chris Walsh, CEO of Marijuana Business Daily. “Some companies have struggled, but in general we haven’t seen an overwhelming number of layoffs or companies going out of business.”
In most states, cannabis businesses were deemed essential during the pandemic. “They were able to stay open while the economy virtually came to a grinding halt,” Walsh said.
However, selling marijuana remains illegal at the federal level, and the industry was ineligible for funds distributed through the Small Business Administration’s Paycheck Protection Program. “It’s just another irony on top of irony about how the country handles cannabis in general,” Walsh said. House Democrats included the industry in previous and proposed pandemic stimulus packages, but to no avail.
Depending on the outcome of next month’s presidential and congressional elections, the likelihood of full federal legalization could be greater than ever. Joe Biden and running mate Senator Kamala Harris support adult-use marijuana decriminalization, moderate rescheduling, federal medicinal legalization, allowing states to set their own laws and expunging prior cannabis convictions.
With more states legalizing marijuana, it’s important to understand this new sector and what it might mean for your business. The cannabis- and CBD-related education sessions during the upcoming NACS Crack the Code Experience will cover your questions and more. Sessions include Cannabis in the Age of COVID, CBD-infused Foodservice: History of Hemp (part 1 of 3), CBD-infused Foodservice: Legal and Regulatory Status of Hemp/CBD (part 2 of 3) and CBD-infused Foodservice: Consumer Trends in the Sale and Use of CBD (part 3 of 3).