3 Unlikely States Are Trying to Legalize Marijuana in 2020 – The Motley Fool
Ready or not, election season has begun. Last month, 20 presidential candidates from the Democratic ticket held two separate debates (10 candidates for each debate), with the field having now grown to roughly two dozen hopefuls.
But this isn’t the only battle brewing. There’s another topic that’s garnering a lot of buzz throughout America, and it’s going to get its share of the limelight in 2020. I’m talking about the green rush, marijuana.
According to Gallup’s latest poll, a record 66% of American adults surveyed this past October supported the idea of legalizing cannabis on a national level. That’s up from a mere 25% who supported legalization in 1995, the year before California became the first state to give the green light to medical marijuana. Today, 33 states have approved the use of medical marijuana for select ailments, with 11 also allowing recreational pot consumption.
Perhaps the bigger question is: Which states will be looking to legalize recreational and/or medical marijuana in 2020?
These states will be looking to legalize recreational cannabis in 2020
There are a number of states that you’d expect to be making a push toward legalization, either at the legislative level or through a ballot vote.
For example, Arizona just missed out on passing a recreational legalization measure in 2016 by roughly two percentage points. Historically, states that have failed to pass recreational legalization measures (e.g., California and Oregon) have succeeded on the second go-around. With cannabis activist groups expected to focus on Arizona in 2020, it’s a strong contender to get a ballot initiative approved, and to legalize.
At the legislative level, New Jersey will be pushing to get its recreational pot initiative back on track. The Garden State looked to have the finish line in sight earlier this year, but ran into problems when lawmakers introduced social issues into the mix, such as expunging certain cannabis-related convictions. Considering how long it took New Jersey Gov. Phil Murphy (D-N.J.) and his legislature to get on the same page regarding taxation in the proposed cannabis bill, a 2020 legalization effort in New Jersey is a clear work in progress.
The same could be said for New York, which may attempt a round two of its own at the legislative level. Like New Jersey, the Empire State appears to have plenty of support for recreational legalization. The concern is that New York lawmakers are also fighting for various social issues that would potentially expunge non-violent pot-related offenses, similar to the marijuana legalization bill that recently passed in Illinois. Passage may not be a given in 2020 if social issues are also included in legalization efforts.
Say what? These unlikely states are trying to legalize adult-use marijuana!
But what might come as a big surprise are the three states whose residents are currently gathering signatures to put recreational legalization bills on their respective ballots for vote in 2020, or whose legislatures are reviewing pending amendments. These states would qualify as surprises given that all three have historically been led by Republicans – members of the GOP usually have a more negative view on marijuana than Democrats or Independents — and none of the three have even legalized medical marijuana.
The first is Mississippi, which is attempting to pass the Mississippi Marijuana Legalization Amendment to the state’s constitution in 2020. The measure, submitted by the Mississippi Cannabis Freedom Fund, would allow individuals age 18 and older to buy and possess cannabis, and it would also legalize medical marijuana. The amendment is currently pending review, but if passed would spread collectible tax revenue to in-state education (40%), in-state healthcare (40%), and Mississippi’s General Tax Fund (20%).
The second shocker is Nebraska, whose residents are gathering signatures to get the Nebraska Cannabis Legalization Initiative on the 2020 ballot. This measure is designed to amend the Cornhusker State’s constitution by adding the following clause: “The object of the Nebraska Cannabis Initiative Petition is to amend the Constitution of Nebraska by adding a new section to Article XV which states that any person in the State of Nebraska has the right to use any plant in the genus Cannabis L. and any parts of such plant in the State of Nebraska.” Signature are due by July 2, 2020, with the need being 10% of the state’s registered voters, and at least 5% of voters in two-fifths of the state’s 93 counties.
Third and finally, residents of South Dakota are also gathering signatures to get the South Dakota Marijuana Legalization Initiative on the 2020 ballot. This measure would legalize cannabis use for persons aged 21 and over, would disallow localities from taxing marijuana and cannabis paraphernalia, and would prohibit law enforcement from keeping state records of marijuana use or possession, as well as paraphernalia possession. Nearly 17,000 signatures of residents will be required to get the initiative on the ballot, with Nov. 3, 2019 being the deadline for collection.
Cannabis has come a long way
Although these three states should be considered long shots to legalize in 2020, the simple fact that the wheels are even being put in motion toward legalization demonstrates just how far the marijuana movement has come in a relatively short period of time. With a number of states likely to take the next step in 2020, U.S. cannabis stocks are now squarely in focus.
Even though consolidation has been the name of the game among multistate operators, licenses only tell half the story. Rather, with legalization becoming more of the norm, Wall Street and investors want to see results. That means operational retail stores, grow farms, and processing sites are what really matter.
Curaleaf Holdings (NASDAQOTH:CURLF), for instance, has been growing its store count organically and through acquisitions. Curaleaf has approximately four dozen open locations, which is tops among vertically integrated dispensary operators, and will have a presence in 19 states following the closure of its recently announced $875 million cash-and-stock deal to buy privately held Grassroots. Don’t get me wrong, Curaleaf’s 131 total retail store licenses is also impressive, but having the most open locations – it’ll have a combined 68 operational stores once the Grassroots deal closes — gives it a clear leg-up on the competition.
Cresco Labs (NASDAQOTH:CRLBF) makes for another interesting play, assuming it closes its acquisition of Origin House (NASDAQOTH:ORHOF). Cresco Labs expects to have a presence in 11 states (on a pro forma basis), with the ability to open as many as 56 retail locations. But the intrigue surrounds the all-stock Origin House deal. Since Origin House is one of a small handful of companies to hold a cannabis distribution license in California, Cresco will be able to get its in-house-branded products into more than 500 dispensaries in the Golden State. This, of course, isn’t the only state where Origin House offers a value-added proposition to Cresco. In fact, Wall Street opines that Cresco may lead all pot stocks in total sales in 2020.
Suffice it to say, if you don’t have U.S. dispensary operators on your radar, perhaps now is the time to change that.
This article originally appeared here in https://www.fool.com/investing/2019/07/27/3-unlikely-states-are-trying-to-legalize-marijuana.aspx