Editor’s Note: This is a developing story and will be updated as election results come in.

Voters will determine the future of adult-use cannabis legalization in five states today, a high-water mark for cannabis reform attempts at the ballot box.

If Arkansas, MarylandMissouri, North Dakota and South Dakota all pass their ballot measures, it would bring the total number of states with adult use up to 24–a number that represents almost half the states in the U.S.

Each of these ballot measures would set a foundation for an adult-use cultivation and retail program except for that in South Dakota, which would legalize possession, use, distribution and home cultivation. (However, South Dakota’s measure does not mention a licensing structure or regulation for businesses.)

This will represent a groundbreaking election season for cannabis. Nearly half the country legalizing adult-use cannabis is a significant feat in its own right–it would mean a majority of the U.S. population supports cannabis reform (a notion supported by many studies, such as a 2019 Pew Research study that found two-thirds of Americans support legalization).

Notably, four of the five states with adult-use measures this year–Arkansas, Missouri, North Dakota and South Dakota–are conservative states, indicating growing bipartisan support on an issue that has been traditionally championed by Democrats.

“I do think continuing to see more and more states, especially states like the Dakotas and places like Arkansas and Missouri that maybe people would not have predicted would have such public support for adult use of cannabis … certainly sends a signal to [the federal government] in terms of where the country stands,” says Matt Darin, CEO of Curaleaf Holdings Inc., an international provider of consumer products in cannabis which has a retail presence in 21 U.S. states, including North Dakota and Maryland. “This is not just a Democratic-led situation.”

New states coming online will also open opportunities for new and existing business expansion.

But in light of President Joe Biden’s three-part cannabis reform plan he announced at the beginning of October, when he directed his administration to review cannabis’s status as a Schedule I drug, this election contains an added layer of significance, as it could help steer future federal policy–for better or for worse.

RELATED: Biden’s Order to Review Cannabis ‘Truly Historic,’ But What’s at Stake?

“I think if we win all five [states], then the narrative starts to very much solidify: ‘Hey, this is a political winner, this just won in these four conservative states,’” says Jared Moffat, state campaigns manager for the Marijuana Policy Project (MPP). “I think the odds of descheduling kind of go up if we win all those states. If it’s a mixed bag, then I think it’s more likely that we see a moderate approach of rescheduling–it’ll be half the pie rather than the whole pie.”

Election Predictions

Leading up to the midterm elections, 18 U.S. states have legalized medical cannabis exclusively, three states have implemented low-THC medical programs, and 19 states have legalized and regulated adult-use and medical cannabis markets. 

Polling in all five states has shown a majority of voters support adult-use legalization. It’s led to optimism from some that all five measures will pass, including from Brian Vicente, founding partner of law firm Vicente Sederberg.

“I’ve run some of these campaigns in the past, and normally we’re polling 50/50 at best, and then we surge because people under-report–they get a pollster calling asking if they support something illegal, [and] they usually say no,” Vicente says. “These are well-run and well-capitalized campaigns, and I think we’re going to see some degree of excitement from more progressive voters this fall because of other issues. … I think it’s super exciting.”

Paul Armentano, deputy director at the National Organization for the Reform of Marijuana Laws (NORML), anticipates voter support for adult-use legalization will remain as strong as it has in years past. In 2016, for example, voters approved legalization measures in California, Massachusetts, Maine, and Nevada, while in 2020, voters approved legalization measures in Arizona, Montana, New Jersey, and South Dakota. (South Dakota’s 2020 election results were later nullified by the Supreme Court.)

RELATED: Where Candidates Stand on Cannabis in All 36 Gubernatorial Races

“It’s always possible that there can be other factors and variables that impact voter turnout,” Armentano says. “There are certainly predictions that Republicans may be far more galvanized in general this midterm than Democrats. And, certainly, it’s possible that if that is the case, that could potentially have an impact on some of these states that are predominantly Republican. But … historically, we’ve seen that these sorts of measures tend to be equally successful in jurisdictions that are traditionally blue, just as likely as they are to be traditionally red.”

In the Dakotas, however, more recent polls show support is waning. Both states have had adult-use measures on the ballot before: South Dakota’s adult-use measure in 2020 passed but was ultimately overturned in the state’s Supreme Court; and in 2018, North Dakota’s reform effort was defeated by 20 points.

Those combined factors make some, including Darin and Moffat, more hesitant to declare every state a winner before the election.

Moffat, who is the campaign manager for the North Dakota ballot initiative, points out that opponents in both North and South Dakota have started putting more resources toward campaigning against the legalization measures in the weeks leading up to the election. He adds that the legalization campaigns in both states have struggled this year to raise money that could have given proponents more of an edge.

“I’m not saying that we’re about to see losses in these states, but I’m also not sitting here saying, ‘Oh, this is in the bag, and it’s just a question of how much we win by.’ No, I don’t feel that way. I think it’s going to be very close in both states,” Moffat says.

“A lot of folks think legalization is just inevitable,” he adds. “It’s not inevitable–a lot of folks have stepped up along the way and given us what it takes to win these campaigns. It’s been very frustrating to see that there hasn’t been that level of support for the Dakotas.”

Market Projections

If all five states pass their initiatives, Madeline Scanlon, insights analyst for cannabis industry research firm Brightfield Group, anticipates Missouri and Arkansas will likely have the biggest impact on the legal cannabis market in the U.S. and will implement adult-use programs first due to their strong existing medical programs.

According to Arkansas’ ballot initiative, if voters legalize adult-use cannabis, existing medical cannabis businesses will be permitted to sell adult-use cannabis at their dispensaries and at one additional location starting March 8, 2023.

Arkansas legalized medical cannabis in 2016 and currently has more than 90,000 registered patients in its program. In a state with a population of just over 3 million, that’s a 3% patient enrollment rate, which is “very strong,” Scanlon says.

She also noted medical cannabis sales in the state are high, as patients spent almost $24 million at the state’s 38 licensed dispensaries in September.

Scanlon anticipates Missouri will trail closely behind Arkansas and open its adult-use program by mid- to late-2023.

Missouri legalized medical cannabis in 2018, and sales began Oct. 16, 2020. The state has a population of 6 million with more than 200,000 registered patients as of September, a 3.3% patient enrollment rate, she says. In the past two years, the state has generated nearly $500 million in medical cannabis sales.

“[Missouri is] probably going to be, out of these markets, bringing in the most money the quickest because they obviously have the appetite, [and] they obviously have the infrastructure,” Scanlon says, adding that she anticipates Arkansas will follow closely behind in sales. “With metrics like that and seeing that … people are taking the effort to be part of this medical program and spend[ing] money, [it’s] a very good sign for those two markets.”

Maryland legalized medical cannabis in 2013 and has roughly 140,000 registered patients according to a 2021 annual report from the Maryland Medical Cannabis Commission. With a population of roughly 6 million, that’s a 2.3% enrollment rate.

Scanlon projects Maryland’s adult-use market to open in mid-2024 at the earliest, noting that eastern states tend to take longer rolling out their adult-use programs. For example, New York legalized adult-use cannabis last year and is still rolling out its program, while Vermont legalized cannabis in 2018, but didn’t launch sales until Oct. 1 of this year.

Maryland’s ballot initiative is also sponsored by lawmakers, and, under the initiative, it is up to the legislature to implement a timeline of when adult-use sales will launch in the state, which could delay the market opening.

Meanwhile, Scanlon doesn’t anticipate either of the Dakotas having a large share of the national market, even if both measures pass. Adult-use sales could start as early as Oct. 1, 2023, in North Dakota, as laid out by the ballot measure, but the state’s population of less than 800,000 people means it likely has a smaller set of consumers. South Dakota, on the other hand, could take much longer to roll out a program.

“South Dakota … just implemented their medical program, they have really no cultivation structure in place, [so] it’s going to take a while,” she says. “The governor [being] begrudging about it too will likely not help speed the process along.”

Despite market size and rollout, each new state to legalize would present a new opportunity for cannabis companies to either make their mark or expand their footprint. Multistate operator Cresco Labs currently has operations in 10 states, including Maryland. The company’s recent acquisition of Columbia Care will soon bring that count up to 17, including in Missouri.

John Sullivan, executive vice president of public affairs for Cresco Labs, says he hopes to see Cresco operate in every legal state eventually, but doing so will take time. 

“We hope to bring our consumer-branded products to every state in the country, but every state presents its own regulatory licensing schemes we have to work our way through,” Sullivan says. “It’s usually not over with the referendum–you have governors and bureaucrats that then try to set a regulatory structure, which inevitably adds layers of complication. So, there still remains to be some things seen before we make that business decision, but in general, each time a state opens up presents an opportunity for Cresco Labs.”

Like Cresco, Darin says Curaleaf sees an opportunity in each market, and the company already has a strong position and leading market share in Maryland and North Dakota.

The company holds four of eight retail licenses and two growing and processing licenses in North Dakota, along with four retail licenses in Maryland.

“Maryland’s a really exciting adult-use market, and that is a market that we definitely intend to continue to expand and to invest in,” Darin says. “Same thing with North Dakota. … We hold half the licenses in that state. We have a very, very keen interest. We had set up our medical operations in a way that we do have the ability to expand [to] adult use as companies [come] into play. And so, I think we’re prepared for that and really looking forward to capturing a significant market share in the North Dakota market.”

Missouri’s rules and regulations currently block publicly traded companies, like Curaleaf, from entering the medical market unless they meet statewide background check mandates and gather fingerprints from anyone with an ownership stake in the company, including all shareholders, but adult-use legalization could change that.

Despite the state’s regulations, Darin says the company has broken into the Missouri medical market through a licensing agreement with a local operator to sell select Curaleaf products.

“Missouri’s been a fantastic medical market. It has wide access, a good number of dispensaries that have opened, and patient cards are accessible,” he says. “It’s really well situated for an adult-use transition given the access and just the amount of distribution and some of the availability of products already in the market. So, it is a place … where we want to continue to participate. … It borders a major state we operate in, Illinois, and it’s definitely a strategic part of the country for us, the Midwest.”

Impact on Federal Legalization

On Oct. 6, President Joe Biden announced his three-step cannabis reform plan, which consists of pardoning federal offenses for simple cannabis possession; urging governors to do the same in their states; and, perhaps most pressing for the industry, requesting a review of how cannabis is scheduled under the Controlled Substances Act.

Some sources CBT spoke with believe the outcome of this midterm election could help sway the result of cannabis’s rescheduling.

“It’s been a decade since Colorado and Washington [legalized cannabis], and I think this election really is a crossroad,” Moffat says. “If we win in Missouri, Arkansas, South Dakota, North Dakota, all of a sudden, [there would be] eight additional Republican senators who represent states with legalization. But if we lose–especially if we lose in two of those Republican states–what message does that send? It sends the message to Republicans that, hey, you know what, it’s 50/50. … People are still undecided. This is still not a political winner. And so, what does that mean for the prospect of federal reform? I’d much rather be in a position of having eight [additional] senators on my side, at least for representing states with legalization, than the opposite or a different scenario where it’s a mixed bag.”

Others, however, believe that even if all five states pass their ballot initiatives, it would not send a message to the federal government that full legalization is imminent.

“The reality is that for quite some time, public polling has shown that about two-thirds of U.S. voters believe that marijuana should be legal, and that includes majorities of Democrats, Independents and Republicans,” Armentano says. “In addition, we are in a situation where about half of Americans reside in a jurisdiction where the adult use of marijuana is legal and the majority of states regulate medical marijuana. The message has been sent, and the message has been received. It’s just a matter of politicians who have failed to act upon that message. But there can be no confusion among federal politicians with respect to where the majority of the American public stands on legalization.”


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