Armanino Blog

Cannabis Legalization Approved in 5 Additional States

by Mike Goral
November 17, 2020

The presidential election certainly garnered most of the electorate's attention on November 4. However, the results also signaled the growing public approval of cannabis, as all five states that had some form of cannabis legalization on their ballots approved it by a significant majority of voters. The five states are:

  • Arizona – adult-use cannabis was added to existing medical use
  • Mississippi – medical use added
  • New Jersey – adult-use cannabis was added to existing medical use
  • Montana – adult-use cannabis was added to existing medical use
  • South Dakota – medical used added

These states alone are expected to generate more than $2.5 billion in sales, with total cannabis sales expected to reach $37 billion by 2024, according to Marijuana Business Daily. When the total impact is factored in, cannabis will provide an estimated $130 billion in stimulus to the U.S. economy.

The recreational market now includes 15 states, and it is moving eastward at a rapid pace. Of particular interest is cannabis legalization in New Jersey, which will add pressure to its neighboring states of New York and Pennsylvania to convince their legislatures to approve adult-use cannabis. In addition, not lost on New Jersey voters was the tax impact that adult-use cannabis can bring to offset any proposed tax increases in individual and property taxes due to loss of revenue during the COVID-19 pandemic.

Prospects for federal legalization will no doubt remain elusive, at least in the near term, since there has traditionally been some resistance to passing any cannabis bills in the U.S. Senate. However, if the two U.S. Senate seats up for grabs in the January runoff election go in favor of the Democrats, this could help efforts to pass at least some safe banking legislation within the next two years.

This industry has always been in a state of flux. We anticipate that we will continue to see rapid developments that benefit the cannabis markets over the next several years.

If you have any questions, reach out to our experts.

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