Advocates for marijuana legalization have had varying degrees of success this year in state legislatures across the US.
In Rhode Island, Mississippi, and Maryland, they have succeeded in securing favorable legislation, paving the way for the combined sales of recreational and medical cannabis businesses in those states to reach hundreds of millions of dollars.
However, at the same time, proponents of the sector have lost in a number of states, including Kansas, North Carolina, and South Carolina.
These defeats highlight the difficulties faced by proponents of the cannabis sector in states where Republicans hold power in the governor’s office, one or both houses of the legislature, or both.
Here is a list of the accomplishments in the business as the first half of 2022 draws to a conclusion, now that more state legislatures have concluded their sessions for the year:
The state of Rhode Island became the 19th to legalize marijuana for recreational use. The market is anticipated to open on December 1 with current medicinal cannabis businesses having first dibs on sales.
A year after the state’s top court invalidated a referendum that received voter approval, Mississippi became the 39th state to legalize medical marijuana. Sales are expected to begin by the end of the year or in the early months of 2023 according to the state’s recent opening of the licensing-application procedure.
Voters in Maryland will decide whether to legalize recreational marijuana in November after lawmakers referred the matter to them. If the proposal is approved, lawmakers will have to decide on a licensing and regulatory framework. Beginning sales are anticipated in 2024 or 2025.
Whereas in Pennsylvania, where the legislature is still in session, there is growing demand for the state to legalize adult-use sales in order to catch up to its neighbor New Jersey.
However, the Pennsylvania Senate Republicans continue to be a significant barrier, and legalizing this year would be a big shock.
While legalization legislation failed in a number of other states, they did progress further along than previously in Delaware (recreational), North Carolina (medical) and South Carolina (medical) (medical).
There is still a remote possibility that North Carolina lawmakers would enact a medicinal marijuana law. However, experts do not see it passing this year.
According to Karen O’Keefe, state programs director for the Washington, DC-based Cannabis Policy Project (MPP), “almost all of the states that have not yet legalized have GOP control over one or both chambers and/or the governor’s palace.”
O’Keefe stated in an email that “Delaware and Hawaii are the only two states with a Democratic trifecta that haven’t yet legalized (recreational marijuana), and both state governors are against.”
The low-hanging fruit has been picked, and there are still more difficult states, according to O’Keefe. It took years of organizing and labor to advance legalization, even in states with Democratic trifectas.
While states continue to legalize marijuana in some form, O’Keefe stated that lawmakers in the majority of states continue to lag well behind their constituents in favor of legalization.
She added that a Democratic governor had really vetoed a legalization bill for the first time.
A bill that would have allowed for the possession and gifting of marijuana was vetoed by Delaware Governor John Carney. A commercial marijuana market would not have been created by the legislation.
This fall, there may be up to five marijuana legalization initiatives on state ballots in addition to legislative activities.
According to O’Keefe, Arkansas, Missouri, North Dakota, and Oklahoma are potential candidates as well as South Dakota, which has already qualified an adult-use proposal.
A close referendum would legalize possession and home growing in South Dakota. However, it wouldn’t open the door to a legal marijuana market.
Here is a closer examination of the three states where pro-legalization legislation has been successful this year:
Providence, RI
Compassion centers, which are now selling medical cannabis in Rhode Island, will be eligible to apply for a hybrid license on December 1 to start selling adult-use cannabis.
A bill summary from MPP states that medical marijuana business owners will have to contribute $125,000 to a social equity fund.
The current market is modest. Last October, the state approved five more licenses for medical marijuana dispensaries, bringing the total number of retail locations in the state to nine.
Other significant commercial information pertaining to the legalization bill is as follows:
New retail licensing: Six geographical zones will see the issuance of 24 new retail recreational marijuana licenses, in addition to the existing MMJ businesses. This will comprise a minimum of one worker-owned cooperative license and one social equity permit in each geographical area. Retailers will have to work with a union to create a “labor peace pact.”
Rhode Island has more than 60 MMJ cultivators, while having few retail establishments. If they maintain good standing, adult-use licenses will be awarded. After the adult-use laws and regulations are approved, the state will put a two-year freeze on issuing new cultivation permits.
Local bans: Municipalities may choose to stay out of the adult-use market, with the exception of locations where medicinal cannabis stores are already present.
Taxes: In addition to the present sales tax of 7%, a retail excise tax of 10% will be applied. Additionally, a local tax of 3% might be enacted.
Mississippi
The licensing application procedure for producers, processors, testing facilities, and transporters in Mississippi for medical cannabis was started in June; however, it might not be until the end of the year or the beginning of 2023 before sales begin.
The law permits localities to choose not to issue licenses, but there is no limit on how many the state may grant.
According to information from the state Department of Revenue, as of May 23, 80 towns and 19 counties had made the decision to outlaw dispensaries. A vote on the matter could be requested by local residents in selected communities.
Purchase restrictions and product-potency quotas are the most stringent clauses.
Patients will only be allowed to purchase around 3 ounces of marijuana per month. It is less restrictive than the 5-ounce monthly cap in the 2020 referendum, which was approved but later overturned by the courts.
Additionally, lawmakers set a cap on THC content of 60 percent for concentrates, oils, and tinctures and 30 percent for flower.
Other crucial company components are:
Growing MMJ indoors is required. There will be six levels of cultivation, with a micro-cultivator having a maximum area of 1,000 square feet and a Tier 6 grower having an area of 100,000 square feet or more.
Seed-to-sale: The new law stipulates that a tracking system will be developed and that infractions would result in criminal charges.
No person or company shall own more than a 10% interest in any one of more than one cultivation license, one processing license, or five dispensary licenses.
Taxes: A 5 percent excise tax will be added to the state sales tax, which is now 7 percent, for wholesale transactions.
Mississippi medical marijuana sales are expected to total between $80 million and $97.5 million in the first full year and up to $627 million by 2026, according to the MJBizFactbook for 2022.
Maryland
In November, Maryland lawmakers put the question of legalizing marijuana for recreational use to the people. The resulting ballot item is projected to pass.
The process leading up to the market debut won’t be so swift, though.
If voters decide to legalize it, lawmakers will need to come to an agreement on a licensing and regulatory framework.
The procedure might be finished during the 2023 legislative session, but certain last-minute elements might take longer.
This is as a result of lawmakers’ reluctance to take action prior to the anticipated mid-2023 publication of a so-called “disparity study” that will aid in figuring out how to create a varied, equitable recreational marijuana industry.
It will take another year or two after the regulatory framework has been established for full regulations to be drafted, licensing to occur, and enterprises to establish their operations.
According to some business leaders, this might delay a market debut until 2025.
