Recreational And Medical Cannabis Legalization Continues To Spread across the US

Written by CBD Intel

One in three US citizens will soon be living in states where recreational cannabis is legal, while around 70% of the population will have access to some form of medical cannabis. That’s after electors in five states voted in November’s ballots to pass medical and recreational cannabis initiatives.

Campaigners in Arizona, Mississippi, Montana, New Jersey, and South Dakota were successful in pushing through two medical and four recreational cannabis programs between them. They were able to do so by focusing on benefits to patients, state budgets from taxes, and touchstone issues such as criminal reform to help gain broad support.

The measures reflect a steady and “pretty rapid shift in opinion” in favor of legalization nationally–particularly given that some of the votes took place in traditionally socially conservative states, according to Daniel Mallinson, an assistant professor who studies state politics and policy at Penn State Harrisburg, part of Pennsylvania State University.

South Dakota became the first state ever to approve medical and recreational use on the same day. A constitutional amendment allows adults to purchase and possess up to 1 oz of cannabis and grow up to three plants for personal use. Recreational cannabis sales will be taxed at 15%.

The state Department of Revenue will issue cannabis-related licenses for commercial cultivators and manufacturers, testing facilities, wholesalers, and retailers. Local governments may regulate or ban the establishment of licensees within their jurisdictions.

Measure 26 directs the legislature to pass laws on the use of medical cannabis permits for qualified patients to possess. It will permit home-cultivated cannabis for medical purposes and establishes a state-regulated retail system for medical cannabis sales.

Erik Altieri, executive director of the National Organization for the Reform of Marijuana Laws (NORML), said: “No state has ever moved from cannabis prohibition to allowing both medical use and adult-use access, quite literally, overnight. These votes are a stunning rebuke to those elected officials that for decades have refused to move forward with substantive cannabis law reform legislation.”

Mississippi voters legalized medical cannabis for patients who have certain conditions. Medical cannabis will be taxed at 7% and patients will be allowed to possess up to 5 oz.

After an initial overall net cost of around $11m to set up the program, the tax is estimated to deliver $10.6m net annually to the state, all of which must be used to support the program, according to state Budget Office analysis.

Voters were presented with two different propositions for legalizing medical cannabis, in what many criticized as a deliberately confusing manner. Voters had to choose whether they were for or against both measures before answering a separate question to list which medical cannabis proposition they supported. Around 75% chose the more expansive, activist-driven option over an alternative proposed by legislators that activists claim was ill defined.

In all, 35 US states will have approved medical cannabis rules once these acts are written and transposed into state regulations. Four states, including South Dakota, approved adult recreational use of cannabis.

Arizonans approved the Smart and Safe Arizona Act. People can possess, use and grow limited amounts of cannabis. They will pay a 16% excise tax on retail sales on top of sales tax for purchases.

An Arizona legislative analysis projected that the excise tax and licensing fees would generate $166m a year once the program is fully launched. The law would also create a process to expunge cannabis-related drug offense records.

Montanans voted to legalize recreational cannabis, regulated by the state Department of Revenue and subject to 20% tax. Cannabis sales will generate $236m in new tax revenue by 2026, according to a study by the Bureau of Business and Economic Research at the University of Montana.

Those with prior convictions for selling or using cannabis could apply for resentencing or expungement of their records.

In New Jersey, recreational cannabis will be subject to state sales tax of 6.625% and be overseen by the state’s medical cannabis commission. Local governments can add a 2% tax.

The constitutional amendment is set to take effect on January 1 but the state attorney general has already warned that state criminal laws continue to apply until the state legislature enacts a law creating that regulatory framework.

There are now 15 states, plus Washington DC, that have legalized recreational cannabis.

Meanwhile, there were also wins for psilocybin in Washington DC and Oregon–with the nation’s capital voting to decriminalize a wide range of psychedelics. Under the measure, which passed by a majority of over 75%, possession and use of entheogenic (consciousness-altering) plants and fungi will be among the district’s lowest law enforcement priorities. It is at least the fourth jurisdiction in the US to enact similar reform.

Oregon went a step further, becoming the first jurisdiction in the country to legalize the medical use of psilocybin without any limitations on the types of condition that would make a patient eligible for treatment. Regulators are now responsible for issuing licenses for the manufacturing, testing and administering of the substance before January 2, 2023.

The state also voted separately to remove criminal penalties for all low-level drug possession offences–the first jurisdiction at any level in the US to do so.

CBD-Intel will run further in-depth looks in the future at that process and the impact this significant shift towards a legal market will have on the overall outlook for the US cannabis market.

CBD-Intel provides impartial, independent and premium market and regulatory analysis, legal tracking, and quantitative data for the cannabidiol (CBD) sector.

We provide our clients with the tools to navigate this fast-moving sector, tailor their business strategy, optimize resources and make informed decisions. In addition, we offer customized research and consultancy support.

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