The Legal Landscape Is Expanding
New York, Virginia, New Mexico, and Alabama are only the latest in a wave of legalization sweeping across the United States. There are now 18 states and districts with recreational legislation and 36 with medical cannabis on the books.
With federal legislators now poised to talk about national regulation, everyone in the sector is buzzing with excitement.
New York Represents a $4.2 Billion Opportunity
When New York State announced it had finally passed a bill legalizing adult use, cannabis companies across the country dropped what they were doing and began focusing on the Empire State.
According to the New York Times, as the third-largest economy in the country and with a population of 20 million, the state’s recreational sales could reach $4.2 billion annually.
Moreover, regulators predict that the state will earn $350 million a year in tax revenue, and the industry could create upwards of 60,000 jobs. Hence why cannabis companies are shifting their focus from smaller markets to concentrate instead on New York. Everyone wants a piece of the action.
The new legislation has also attempted to the right the wrongs of a lengthy history of discrimination from the War on Drugs. A significant portion of the tax revenue will focus on helping marginalized communities, who suffered disproportionately from former anti-cannabis legislation.
New York is also working on letting smaller entities have a piece of the pie by ensuring at least 50 percent of licenses go to BIPOC or women-owned businesses. There are also measures preventing vertical integration from seed to sale, meaning cultivators cannot also hold retail licenses.
Despite the national excitement about New York’s adult market, it will likely be another two years before retail sales go online.
Virginia is the First Southern State With Adult Use
Another exciting market opening up in the US is Virginia. Advocates are hopeful that Virginia represents the first, but not last, Southern state to legalize recreational cannabis. With the South historically more conservative when it comes to cannabis policies, many are anticipating this legislation represents a greener future for the region.
In Virginia, adults can legally possess small amounts of cannabis as of July 1, 2021. However, the entire legislation — all 280 pages of it — will take much longer to implement. First, the state must set up the Virginia Cannabis Control Authority, and only on July 1, 2023, will the state begin accepting applications for retail sales. One year after these applications, in 2024, retail sales are set to begin.
State residents may have a long time to wait before they can legally buy cannabis from a retailer, but the state is allowing for homegrown production of up to four plants and gifting as of July 1, 2021.
Importantly, Virginia is also attempting to atone for the past through this new cannabis legislation. Tax revenue from adult cannabis will, in part, go toward marginalized communities, and all prior misdemeanor arrests, charges, or convictions for possessing or selling cannabis will quickly be removed from public view.
Of course, not all states are as eager to implement adult cannabis legislation like New York and Virginia. While every state has had legislation introduced at some point over the last few years, several states have stalled in their attempts to pass (and keep on the books) pro-cannabis legislation.
Minnesota is one of those states whose Democrat-led House passed recreational cannabis legislation in early May, but most experts predict that the Republican-majority Senate will not be as supportive.
Florida also failed to get any of the adult-use bills up for voting. Several bills languished in legislative committees, and none ended up making it before the end of the session. Now, Floridians must wait until 2022 to try again.
Meanwhile, in a state that continues to aggressively counter any and all pro-cannabis legislation, Idaho legislators attempted to pass a constitutional amendment banning drug policy changes through ballot measures. There was substantial support for this measure, but not enough to pass. Idaho remains one of the last states with absolutely no legal hemp or cannabis in the country.
A Majority of States Providing Legal Access
Between recreational and medical programs, a clear majority of states now allow their residents access to cannabis. While the Biden Administration may not be as pro-cannabis as some would like, other legislators are attempting to push for change to federal drug laws.
This spring, two senate Republicans introduced the Common Sense Cannabis Reform for Veterans, Small Businesses, and Medical Professionals Act in yet another push to federally deschedule cannabis. Whether or not this bill will earn any traction in a time when bipartisan sentiment is at an all-time low remains to be seen. Until federal legislation passes, it's up to states to set up their state-based cannabis programs in what is becoming a patchwork quilt of cannabis law.
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