May 14, 2021 8 min read
This story originally appeared on MJBizDaily
Several more states could legalize adult or medical marijuana use before their legislative sessions are suspended in 2021, potentially creating hundreds of millions of dollars in new business opportunities in the years to come.
After New Jersey and New York legalized recreational marijuana programs that are expected to generate more than $ 4 billion in annual sales within a few years of their inception, industry experts are closely monitoring the east coast states of Connecticut, Delaware, and Rhode Island. Virginia and New Mexico legalized adult use earlier this year through their legislation. Together, these two states are expected to have annual sales of around $ 2 billion five years after sales begin. It is uncertain which additional state lawmakers will actually pass legislation this year as the political dynamics can change quickly.
For example, Connecticut seems a little less likely to do this than it did a few months ago, industry experts said. Pennsylvania and Minnesota continue to have roles in legalizing adult markets, but passage seems unlikely.
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Red states in play
The new Marijuana Business Factbook for 2021 counts 38 states and Washington DC with medical marijuana programs. As a result, MMJ’s legalization work is now focused on more conservative red states. Alabama seems most likely to legalize MMJ at this point, industry experts said, noting that a measure has passed the Senate and is now going to full house. Nebraska, Kansas, and South Carolina seem unlikely. North Carolina became perhaps when the chairman of the state’s powerful Senate committee tabled a bill.
Texas is another state to watch: there is already a limited medical marijuana program in place, so MJBizDaily doesn’t classify it as a full-fledged MMJ state. But legislators could get a significant boost this year. A State House committee has proposed legislation to raise the THC limit from 0.5 to 5 percent by weight and add qualifying conditions such as chronic pain and post-traumatic stress disorder.
This year’s legalization activity follows a clean run in the ballot box in November, as voters in Arizona, Montana, New Jersey, and South Dakota approved adult use and residents in Mississippi and South Dakota passed medical marijuana initiatives.
Karen O’Keefe, state policy director for the Marijuana Policy Project, and Carly Wolf, state policy manager at NORML, say strong public support is also the driving force behind legalization by state lawmakers. According to a Quinnipiac University national adult survey released this month, more than two-thirds of Americans support legalization of recreational activities.
“Now that 40 percent of Americans live in a place where marijuana is legal for all adults, legislators at all levels are under pressure to act according to people’s will,” Wolf wrote in an email to MJBizDaily. “The more states push legalization, the more contactless states appear,” added O’Keefe. “Marijuana shops near state lines have parking lots full of license plates from their forbidden neighbors. It is a very clear example of economic growth that states cede to their neighbors the longer they do not listen to the voters. “
The state legislature is drawn to tax revenues, jobs, and the general economic development that legalization brings with it. The coronavirus pandemic, which has weighed on state budgets, has also put additional pressure on some state lawmakers and governors to act.
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A “heavy lift” in some states
O’Keefe noted, however, that while the legalization momentum is strong, “there is still a major boom in state law”.
For example, earlier in the year prospects for adult legalization in Maryland and legalization for MMJ in Kentucky looked promising. But efforts in Maryland stopped, as did the legislation in Kentucky. It might surprise some that the prospects for medical marijuana legalization are greatest in Alabama. The Alabama Senate has passed law three years in a row. Last year the coronavirus derailed the possibility of a vote in the House of Representatives, but this year two committees transferred a changed measure to the entire House of Representatives.
“It’s not perfect legislation,” said Whitt Steineker, co-chair of cannabis practice for Bradley, Alabama-based law firm. “But if you’re a proponent and proponent of medical cannabis, it’s hard not to be encouraged by the fact that the legislation seems to be dynamic. It’s a big step that many people wouldn’t have thought possible a year or two ago. “
Here’s a look at the bills in states most likely to adopt action this year, as well as some key business aspects of the bills. Much of the information comes from invoice summaries produced by the Marijuana Policy Project.
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Most likely, measures for adult use will be adopted
Connecticut (Legislature Postponed June 9)
Senate Law 888 proposed by the Ned Lamont Democratic Government
- The measure provides for vertically integrated micro-business licenses and calls for an equity commission to create a licensing program that guarantees equal access for people from disadvantaged communities.
- Medical marijuana dispensaries could be converted into adult double MMJ stores and start selling on May 4, 2022.
- In addition to the state sales tax of 6.25%, wholesale taxes are set in Lamont’s invoice. A State House finance committee recently voted to support a move to introduce a sales tax of 20 percent and a local tax of 3 percent.
- Percent MJBizDaily predicted late last year that a recreational marijuana market in Connecticut alone could generate $ 725 million in sales by its fourth year of operation.
- A March survey by Sacred Heart University found that 66 percent of respondents were in favor of legalizing adult use.
Delaware (Legislation Postponed June 30)
House Bill 150, put forward by a House Committee and now before the means that could transfer the legislation to the whole House:
- The measure provides for the following number of licenses to be issued within 19 months of the entry into force of the law: 30 retailers, including 15 social justice applicants; 60 cultivators, including 20 social justice petitioners; 30 manufacturers including 10 social equity applicants and 10 micro-businesses. Half of the cultivation licenses would be less than 2,500 square meters of canopy.
- It would also issue five licenses for testing laboratories, including two for social justice applicants.
- A 15 percent tax would be levied on retail sales. The legislature would decide how the funds should be used.
Rhode Island (Legislation Postponed June 30)
Legislature is considering two competing bills, Governor Dan McKee’s Legalization Plan and Senate Bill 568. In any case, the municipalities could ban facilities for the use of adults through a voter referendum.
Senate Act 568:
- A wide range of licenses for the cannabis business would be made available, including permits for “craft cultivation” with low application fees.
- A cannabis control commission would set guidelines to encourage participation from those from communities disproportionately harmed by the war on drugs.
- License and application fees would go into a fund to provide interest-free loans to social equity companies.
- A consumption tax of 10 percent would be offset against the normal sales tax of 7 percent, and the municipalities could levy an additional local sales tax of 3 percent.
The governor’s plan:
- Regulators would issue 25 retail licenses per year for three years and could set a license cap in the future. Licenses would be issued through a lottery system.
- 20 percent of retail licenses would be given to minority companies.
- Existing medical cannabis operators could get a dual MMJ and adult license. Initially, only existing licensed MMJ operators are allowed to receive an adult cultivation license.
- Vertical integration would be prohibited, except in the case of the current vertically integrated MMJ operators.
- In addition to the normal sales taxes, a consumption tax of 10 percent would be charged. There would also be a tax on marijuana sold by growers equal to $ 10 an ounce or $ 3 an ounce for trim.
Most Promising Medical Marijuana Measures
Alabama (Legislature Postponed May 30)
Senate Act 46:
- The rules would have to be adopted in good time so that applications can be submitted by September 1, 2022. Applications would be approved or rejected within 60 days.
- A Medical Cannabis Commission would license up to five vertically integrated licenses, a minimum of four cultivation licenses, no more than four processor licenses, and no more than four pharmacy licenses, each of which could have up to three locations in different counties. The vertical operators could each have up to five pharmacies in different counties.
- The commission would set the maximum daily dose of THC that can be recommended for each qualifying condition. In most cases it wouldn’t exceed 50 milligrams.
- Pills, gelatin cubes, lozenges, oils, suppositories, nebulizers and plasters would be acceptable. Smokable flowers, raw plants for steaming, sweets and baked goods would be prohibited.
- A 9 percent tax would be levied on retail sales of medicinal cannabis.
North Carolina (legislation adjourned July 2)
Senate Law 711:
- A state medical care commission would have to issue regulations no later than 120 days after the effective date of the law. A Medical Cannabis Production Commission would work with the Medical Care Commission to set licensing requirements and qualifications.
- Doctors might recommend MMJ for conditions like cancer, epilepsy, glaucoma, AIDS, Crohn’s disease, Parkinson’s disease, and multiple sclerosis.