Cannabis legalization has become a major topic around the United States in recent years as more States begin to see credible reasons to decriminalize and allow usage of the plant. Currently, 30 of the 50 States have legalized cannabis on at least the medical level while out of these 30 States, 9 of them including Washington D.C. have legalized recreational use for persons over 21 years of age. While cannabis remains a Scheduled Substance according to the Federal government, Attorney General Jeff Sessions claimed that he would fight to stop the legalization efforts, more and more States have adopted recreational and medical use. Vermont passed recreational legislature as of July 1st and Oklahoma successfully voted “Yes” on State Question 788, which allows medical cannabis to be sold, on June 26th.
Furthermore, President Trump has said he “probably will end up supporting that, yes,” when asked about Senator Cory Gardner effort to push through a legislative proposal on the Federal level. While he is at odds with some of the government on this issue, most notably Mr. Sessions, Gallup’s 2017 poll has found that roughly 64% of the population supports legalization of the plant on a national level. In the entire country, only 4 States currently do not allow any form of cannabis, South Dakota, Nebraska, Kansas and Idaho. While only these four States do not allow cannabis, the 16 remaining States currently have some sort of cannabidiol oil or medical marijuana legalized while some are working on gaining full recreational usage in the near future.
New Jersey is one of the front-runners for recreational cannabis as newly elected Governor Phil Murphy ran on a platform that included recreational legalization within his first 100 days in office. Michigan has already given out the first medical licenses to cultivators, distributors and processors last month, but the potential USD 700 Million market still has test results pending. Governor Cuomo has established a panel to iron out the legislation necessary to push recreational legalization in New York State in the upcoming Senate session. As New York goes, so could other surrounding States that currently only have medical permits for the plant, especially when the potential influx of money is considered. New York City Comptroller Scott Stringer “estimates the potential market for adult-use marijuana in New York state at roughly USD 3.1 Billion, including approximately USD 1.1 Billion in New York City,” the market could bring in roughly USD 436 Million a year in taxes on cannabis.
Nevada, a State that has allowed recreational and medical sales of cannabis since November 2016, presents a good example of the benefits of legalization. In the first 10 months of legalization, the state sold over USD 340 Million worth of cannabis and brought in USD 55 Million in taxes. One company, CLS Holdings USA Inc. (OTCQB: CLSH) and its subsidiary, Oasis Cannabis, provided a report of its first full year of operation in the State. According to the release, Oasis served 127,000 customers, with 22% of their total sales going to medical patients. Additionally, the Company revealed that “the average order from a medical
customer was USD 73 whereas a typical recreational customer spent USD 41 per order.” Although not the most populous state, Nevada is a good benchmark for states which have yet to legalize the plant in terms of the financial benefits of the legislation, as both sales and tax revenue outpaced initial estimates.
While there are various roadblocks that recreational cannabis faces, the continued efforts to legalize the plant around the nation should eventually lead to a change in the Federal government. More states plan to roll out legislation favoring recreational cannabis this year and the pressure will continue to mount on Washington and President Trump to change how the Federal government deals with cannabis and the States in which it is legal.
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