How the 2020 Election Impacted Cannabis Legalization by State


The 2020 U.S. Election has made a lasting impact for a number of reasons—but politics notwithstanding, the election also saw a number of states move to legalize marijuana in the absence of cannabis reform at the federal level. For cannabis businesses, this has muddied the water in terms of how they can operate legally and ethically across different jurisdictions.

There is some potential hope on the horizon—the U.S. House is set to vote in early December on a bill to end federal cannabis prohibition, but the bill faces a stiffer battle in the Senate. Going into the 2020 Election, there were 33 states that permitted medicinal cannabis use, with 11 (and D.C.) that permitted recreational use. This time around, five states included referendums on recreational marijuana usage, with another one holding one to approve medicinal usage.

While these regulatory shifts taking place represent steps in the right direction and broader markets opening up, they are also making life increasingly complex for cannabis businesses who want to ensure they aren’t running afoul of the law.

In this post, we’ll highlight the changes to state marijuana laws and let you know what you need to do to remain compliant.

Oregon

In one of the most dramatic drug policy reforms ever enacted in the United States, the voters of Oregon moved to decriminalize hard drugs, making it a non-criminal violation to possess:

  • Less than 1 gram of heroin
  • Less than 1 gram, or less than 5 pills, of MDMA
  • Less than 2 grams of methamphetamine
  • Less than 40 units of LSD
  • Less than 12 grams of psilocybin
  • Less than 40 units of methadone
  • Less than 40 pills of oxycodone
  • Less than 2 grams of cocaine

The ballot measure also shifted tax revenue from marijuana, which has been legal for recreational use in the state since 2014, to funding addiction recovery and treatment programs, and legalized psilocybin, the primary psychoactive compound found in magic mushrooms, in supervised therapeutic settings.

Impact on your cannabis business:
Low – cannabis remains legalized in the state, as it has since 2014.

Washington

Initiative 502, passed in 2012, made Washington the second state after Colorado to legalize the recreational use of marijuana for adults, with the following caveats:

  • Only adults age 21 and older can purchase and possess marijuana.
  • Adults age 21 and over can purchase up to one ounce of useable marijuana (the harvested flowers, or “bud”), 16 ounces of marijuana-infused edibles in solid form, 72 ounces in liquid form, and 7 grams of marijuana concentrates.
  • Marijuana can only be sold and purchased at state-licensed retail stores. A valid photo I.D. is required, and no one under 21 is allowed on the retail premises. Many retail marijuana stores only accept cash.
  • It is illegal to consume marijuana in view of the public.
  • It is illegal to drive under the influence of marijuana if you have more than 5 nanograms of active THC per milliliter of blood. Doing so may result in significant legal penalties.
  • It is illegal to take marijuana outside of Washington. Doing so may result in significant legal penalties.

Impact on your cannabis business:
Low—cannabis remains legalized in the state.

California

Proposition 64, passed in 2016, paved the way for cannabis legalization in the state, and since then, it’s been legal for adults to:

  • Possess, transport, process, purchase, obtain, or give away, without any compensation whatsoever, no more than one ounce of dry cannabis or eight grams concentrated cannabis to adults the age of 21 or older.
  • Possess, plant, cultivate, harvest, dry, or process no more than six live plants and those plants’ products in a private residence, in a locked area not seen from normal view, in compliance with all local ordinances.
  • Smoke or ingest cannabis.
  • Possess, transport, purchase, obtain, use, manufacture, or give away marijuana paraphernalia to peoples the age of 21 or older.

Impact on your cannabis business:
Low—cannabis remains legalized in the state.

Colorado

The bellwether state for cannabis legalization, Colorado passed Amendment 64 in November of 2012, leading to the legalization of recreational marijuana in 2014. Marijuana sales have grown from $683m in 2014 to $1.7b in 2019, aiming to climb again in 2020. In 2019, the Governor of Colorado signed a law that would allow licensed businesses to have social marijuana use areas.

Impact on your cannabis business:
Low—cannabis remains legalized in the state.

Nevada

In 2016, Nevada voters approved the Initiative to Regulate and Tax Marijuana (Question 2). Beginning January 1, 2017, recreational marijuana use became legal in the state. Adults in Nevada are allowed to possess up to an ounce of marijuana and up to 1/8 of an ounce of concentrated marijuana.

Impact on your cannabis business:
Low—cannabis remains legalized in the state.

Oklahoma

In 2018, Oklahoma passed the Medical Marijuana Legalization Initiative, approving cannabis for medical use in the state—however, recreational use remains illegal. Cannabis for medical use is legal for possession to individuals with a state-issued license, while CBD oil derived from industrial hemp is legal without a license. Under the law, individuals with a state-issued license and a doctor’s note can possess:

  • 3 ounces (85 grams) of usable cannabis on them and 8 ounces (227 grams) at home
  • 1 ounce (28 grams) of cannabis concentrates
  • 72 ounces (2 kilograms) of edible products

Despite the lack of recreational approval, Oklahoma has quietly become one of the USA’s hottest cannabis markets.

Impact on your cannabis business:
Medium—recreational use remains officially illegal, though Oklahoma is considered a ‘de facto recreational market,’ and a fast-growing one at that.

Michigan

In November of 2018, Michigan voters elected to make Michigan the 10th state (and first in the Midwest) to legalize marijuana for recreational use. The first dispensaries opened to the public in December 2019. Under the law, adults 21 and older may possess:

  • 2.5 ounces of cannabis flowers or 15 grams of concentrate
  • Up to 12 marijuana plants and the harvest of those plants, up to 10 ounces, or 284 grams, in their home
  • Adults may gift small amounts of cannabis but are prohibited from selling cannabis without a license

Impact on your cannabis business:
Medium—recreational use is recently legal in the state.

Vermont

In January of 2020, the Governor of Vermont allowed Vermont S. 54 to pass without his signature, making recreational marijuana sales legal in the state for the first time (after decriminalization in 2018). The bill stipulates that localities must opt-in to having retail establishments, special consideration be given to small-scale cultivators and businesses owned by people of color and women, and a Cannabis Control Board (CCB) be established.

Recreational cannabis outlets are planned to open in 2022—when they do, adults 21 or over will be able to purchase:

  • Flower that doesn’t have more than 30% THC and concentrates with no more than 60%
  • THC Edibles with up to 50 milligrams of THC with servings of no more than 5 milligrams of THC each
  • Oil in the form of unflavored vape pen cartridges only

Impact on your cannabis business:
High—retail cannabis outlets are still a year out from opening, and there are specific limitations around the kinds of products able to be sold. Large-scale cannabis operations will also want to note the provision offering special consideration be given to small-scale cultivators.

New Hampshire

New Hampshire has permitted medical marijuana since 2013 and voted to decriminalize in 2017. Still, recreational use remains illegal and is likely to stay that way through at least the next four years as recently elected Governor Chris Sununu opposes legalization. Under the decriminalization bill, possession of cannabis of 0.75 ounces or less became a civil offense punishable with a $100 fine for a first or second offense and $300 for a third offense.

Under the medicinal marijuana program, New Hampshire maintains a restrictive list of conditions for patients to qualify for a card, and dispensaries must be non-profit.

Impact on your cannabis business:
Low—recreational cannabis will likely remain illegal for the foreseeable future.

Massachusetts

After voting to legalize recreational cannabis in 2016, the law legalizing retail cannabis sales in the state wasn’t enacted until July 2018. Under the law, municipalities have the power to limit where stores can operate according to zoning bylaws or can prohibit stores from operating at all—in fact, 106 cities and towns in the state have enacted a permanent ban or moratorium on retail cannabis sales. The law also stipulates that retail marijuana businesses must negotiate a Community Host Agreement with the city or town in which it is located pursuant to Massachusetts Law. Possessing an open container of cannabis in a vehicle can result in a fine of $500.

Impact on your cannabis business:
High—the patchwork of municipalities with retail bans can complicate the transportation and sale of cannabis products. Businesses are advised to do their research before selling products in the state.

New York

Surprisingly, New York has still not approved recreational marijuana use. Cannabis was decriminalized in the state in 2019, making possession of up to 2 ounces (57 grams) a violation subject to a $200 fine. The law has not changed penalties for possession of larger amounts of marijuana, nor has it decriminalized marijuana dealing, sales, or trafficking. Medical marijuana products may not be transported outside of New York.

While the state is poised to approve recreational use, largely due to budget shortfalls brought on by the COVID-19 pandemic, there is currently no timetable for that happening.

Impact on your cannabis business:
Medium—changes are on the horizon, but the transport of marijuana remains illegal in the state.

New Jersey

In the 2020 election, New Jersey voted to approve the Marijuana Legalization Amendment 67% to 33%, becoming the 12th state to approve recreational marijuana. Beginning January 1, 2021, recreational cannabis will become legal for adults in the state. The legislation has not yet established a framework for retail sales, nor has it specified the amount of cannabis that is legal.

Impact on your cannabis business:
High—stay tuned for forthcoming guidance, but legislators have indicated they intend to fast-track retail sales approval.

Pennsylvania

Despite neighboring New Jersey’s recent approval, recreational cannabis use remains illegal in Pennsylvania—though likely not for long. Considering 40% of Pennsylvania’s population lives within a 30-minute drive of New Jersey, Pennsylvania will probably want to retain tax revenue that would otherwise flow into their coffers. Governor Tom Wolf and Lieutenant Governor John Fetterman have become increasingly vocal about the push to legalize recreational marijuana in recent months—a trend we expect to continue.

Impact on your cannabis business:
High—recreational approval seems likely.

Montana

Montana I-190, the Marijuana Legalization and Tax Initiative, was passed by Montana voters in the 2020 election. Under the bill, possession, and use of up to an ounce of marijuana with no more than 8 grams in concentrate form for adults age 21 and older is legal. The bill also allows for individual counties to prohibit dispensaries through a public vote. Recreational sales are expected to begin in approved counties in January 2022.

Impact on your cannabis business:
High—cannabis businesses will have access to this new market shortly.

Arizona

The November 2020 elections also saw residents of Arizona vote to legalize cannabis by a 60%-40% margin. Under the Marijuana Legalization Initiative, adults can possess up to an ounce at a time and grow six plants. Retail marijuana sales are expected to begin shortly after March 2021, so cannabis dispensaries in the state are already expanding and staffing up for the expected boom.

Impact on your cannabis business:
High—Arizona is poised to become a major market in the recreational cannabis business, and retain sales should begin shortly.

Mississippi

Mississippi voters elected to approve Initiative 65, authorizing the use of medical marijuana in the state, in the 2020 elections. Under the new legislation, approved patients will be allowed to possess up to 2.5 ounces of cannabis. Physicians will be able to recommend medical marijuana for patients with debilitating conditions and allow those patients or their caregivers to purchase, possess, and consume cannabis medicine. The department of health will begin issuing patient I.D. cards and dispensary licenses by August 2021.

Impact on your cannabis business:
High—Mississippi will open for medicinal business in early 2021.

South Dakota

South Dakota became the first state in the U.S. to legalize recreational and medicinal marijuana in the 2020 election, passing Amendment A and Initiated Measure 26. Amendment A legalizes recreational marijuana for adults 21 years or over, while Initiated Measure 26 legalizes the medical use of marijuana and the sale, delivery, manufacturing, and cultivation of cannabis for people with debilitating conditions. Both of these legislations will take effect in July of 2021.

Impact on your cannabis business:
High—dual markets opening concurrently and serving two separate markets will represent a logistical challenge but a great opportunity for cannabis businesses.

Canada

Canada didn’t have an election or make any recent changes to cannabis legislation. Still, the U.S. could stand to look to them as an example when they legalized recreational marijuana at the federal level in 2018. Since then, monthly sales have grown from $53.7m in October 2018 to $129m in October 2019, to $244.9m in October 20201. While admittedly less lucrative than the U.S., the Canadian market represents an opportunity for cannabis manufacturers and retailers due to clear guidance at the federal level for compliance.

Access to Legal Cannabis is Poised to Grow in the United States

Eight years after Colorado and Washington first voted to approve recreational marijuana, a third of the United States lives in a state or city where recreational marijuana use is legal—representing significant progress with more yet to come. For cannabis businesses operating within the U.S., the complexities of navigating individual state and municipal regulations can be a headache, but there are solutions that can help them recognize the opportunity that exists in emerging markets and capitalize on them while remaining compliant.

Learn more about how a Cannabis ERP System can help you stay compliant.

Protecting and growing your cannabis business can be done with the right set up of business process and technology tools designed to help you manage your seed to sale process and maintain compliance with changing or different regulations. To learn more about how to find and select the right cannabis business software, check out Tigunia’s Cannabis ERP Software Buying Guide. And if you have questions about this or any other cannabis business problem, we’d love to chat!

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