Despite a delay in the U.S. House of Representatives vote for a bill that would seek to legalize cannabis at the national level, the legal cannabis market in the U.S. still stands to substantially grow as more states plan to let voters decide whether they want to legalize it.
According to a new report from cannabis market firm New Frontier Data, state ballot measures slated for 2020 in five states — Arizona, Mississippi, Montana, New Jersey and South Dakota — could be the green light for adding $9 billion dollars to the size of the nation’s legal cannabis market if all are approved by voters this November.
“The 2020 election could be one of the most consequential and historical events to change the landscape of the legal U.S cannabis industry,” New Frontier Data CEO Giadha DeCarcer said in a release. “With $9 billion in new revenue from 2022-2025, should all five states ballot measures pass, New Frontier Data estimates that revenues from all legal U.S. markets will reach $35.1B in 2025.”
In a way, the upcoming state votes could have a more immediate impact on legal cannabis in the U.S. than even the delayed House vote on the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act would have since it’s not expected to be taken up as long as Senate Majority Leader Mitch McConnell remains atop the Republican-controlled chamber.
In Arizona, Proposition 207 would legalize recreational adult-use in the state in non-public places. With an estimated 1.2 million cannabis consumers in the state, New Frontier Data estimates that annual revenues for legal adult-use cannabis will exceed $1 billion in Arizona by 2024 if the proposition passes. Polling remains close, however, with only 51% support at last clip — roughly in-line with where support was when a similar initiative failed in 2016.
In New Jersey, potentially the largest new state market if voters approve the similar ballot initiative there, annual sales of legal adult-use cannabis could reach $1.8 billion by 2024, according to New Frontier Data. The state would become the first Mid-Atlantic state to approve recreational cannabis and could draw significant demand from neighboring states. The latest polling on the ballot initiative shows nearly two-thirds of likely voters approve of legalizing cannabis.
And in a sign of the times, even South Dakota is looking poised to approve legal cannabis use in some form — whether it be medical or recreational — through two separate ballot measures that both appear poised to pass. With an estimated 97,429 current cannabis consumers in the state, New Frontier Data estimates that annual sales of legal adult-use cannabis in South Dakota will exceed $122 million by their fourth year.
Whether or not all state measures, past momentum at the federal level has clearly mounted. As Cowen Managing Director Vivien Azer recently noted, “it was inconceivable four years ago that the House would vote to legalize cannabis. The safe position for a Democrat in 2016 was to oppose legalization. Today it is to support legalization.”
As odds of Democrats retaking control of the Senate rise, so too do the odds of cannabis legalization at the federal level. As Curaleaf CEO Joe Lusardi told Yahoo Finance earlier this year, Democrats taking the Senate could set up a quick move to legalize marijuana at the federal level even if President Trump wins re-election.
Zack Guzman is the host of YFi PM as well as a senior writer and on-air reporter covering entrepreneurship, cannabis, startups, and breaking news at Yahoo Finance. Follow him on Twitter @zGuz.
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