(BREAKING NEWS: Just before our press time, U.S. Attorney General Jeff Sessions resigned from his post at the request of President Donald Trump, effective immediately. Sessions was the most outspoken opponent of statewide or federal-level cannabis legalization within the Trump Cabinet. Cannabis Profits Daily will bring you in-depth analysis of this massive development and its impact on investing going forward in tomorrow’s edition).
Election Day 2018 marked another resounding victory for cannabis.
Voters in each of the three states with the most important legalization efforts passed their referendum questions. And President Trump carried all three of those states on the way to his 2016 victory.
Here at Cannabis Profits Daily, this is a surprise – we knew going in that 66% of Americans favor the legalization of cannabis for recreational use and more than 90% want it to be legal for medical application.
Still, the results are big news for cannabis investors.
That’s because there are major benefits to adding one of the largest states by adult population and one of the reddest states to the pro-cannabis bandwagon.
Red States Rush to Cannabis Green
Utah and Missouri voters approved medical cannabis measures, while Michigan joined the ranks of states with full legalization. Whether for medical healing power with reduced risk of addiction versus opioids or economic opportunity or simply personal freedoms, voters in huge numbers found something on which to hang their hats.
The biggest news was in Utah. Utah voters passed Proposition 2, creating a medical cannabis regime in the state. The Utah change is not going to move the needle in a massive way. After all, the illicit market in Utah is fairly small.
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It’s such a big deal because of what the positive vote represents. Utah is among the most conservative of states, particularly when it comes to “sin” products. Its liquor laws are among the most restrictive in the country, and it taxes alcohol at a high rate. Utah also has the lowest smoking rate in the United States.
So, the realization among voters and the legislature of the health benefits of cannabis is a big win. What’s more, The Salt Lake Tribune reports that one in five voters was motivated to go to the polls specifically because of the cannabis proposition.
In Michigan, voters legalized cannabis for recreational use by a wide margin when they approved Proposal 1. That makes it the tenth state where it is legal for all adults to consume cannabis – it is also recreationally legal in Washington, D.C.
Up to 7.3 million adults will be eligible to purchase cannabis once the program is rolled out. Estimated sales could reach $1 billion annually, according to The Detroit Free Press.
Michigan’s law also has among the lowest taxes for recreational cannabis in the country.
Finally, Missouri approved its Amendment 2 by a wide margin. Amendment 2 creates a medical cannabis framework for the first time in Missouri. This new market increased the total value of cannabis in the United States by approximately $600 million per year.
Importantly, Amendment 2 was the least restrictive of the three cannabis-related questions on Missouri’s ballot.
The only disappointment was in North Dakota and, frankly, that’s not a market that matters all that much for our purposes. The North Dakota statutory language included some odd provisions that deviated from other successful recreational cannabis programs in the country. Those provisions hurt the chances for passage.
But with such a tiny population and illicit market, the failure is a non-event in the context of the much bigger changes in other states.
Congress, States Racing to Make the Next Wave to Expand Cannabis Market
Federally, there are several bills before Congress designed to relax the federal restrictions on cannabis and related hemp products. These efforts include the full normalization of hemp as a cash crop, removing restrictions on Veterans Administration doctors discussing cannabis-based treatment with their patients, easing antiquated banking restrictions, and increasing research.
There are more than 70 cannabis-related proposals between the U.S. House of Representatives and Senate. And an incoming Democrat-majority in the House creates an opportunity.
Voters are starting to tire of partisan-based gridlock in many areas. And this divided government will look for bipartisan bills to prove to the people that the government can still get things done as the new Congress gets seated.
Of course, there’s more action to come on the state level, too – and it will hit long before the next election. As Vermont and West Virginia have proven, states don’t always wait anymore for the voters to put a legalized cannabis program into action.
New Jersey has been working hard to legalize recreational cannabis before the end of the year and, importantly, before New York does it to attract the dollars of local customers, tourists, and investors.
I’ll get into that deeper here next week.
The key takeaway is that the positive news for U.S. cannabis investors continues beyond yesterday and today…
This unstoppable momentum is why investing in cannabis will be the easiest fortune you will ever make.
Thanks for being an important part of the National Institute for Cannabis Investors,
Executive Director, National Institute for Cannabis Investors
P.S.: With Election 2018 behind us, I want to get back to talking more about cannabis as an industry. And there’s no better measure of how cannabis stocks are doing as a collective than our NICI Index. Before the weekend hits, I’m going to walk you through what my best-in-class research team and I have put together for you.
November 07 2018