|14.8 Million More Americans Can Legally Buy Marijuana Following Votes in Key States -- The Motley Fool|
Voters in Michigan, Missouri, and Utah passed pro-pot legislation on Nov. 6, clearing the way for nearly 15 million adults in those states to legally buy and use marijuana. About 7.8 million adults will be able to use recreational marijuana in Michigan and 7 million adults will gain access to medical marijuana in Missouri and Utah following Tuesday's vote. Here's what you should know about America's green wave.
There are 33 states this morning that have legalized marijuana in one form or another, including 10 states that have legalized it for recreational use.
Marijuana buds in front of an American flag.
IMAGE SOURCE: GETTY IMAGES.
The growing momentum toward legalization reflects a tidal shift in attitudes toward cannabis by mainstream America. According to Gallup polls, 66% of Americans favor legalizing marijuana, up from 25% in the mid-1990s.
Importantly, support for changing laws that have prohibited marijuana's use since 1937 cuts across party lines. The idea is widely popular with Democrats, with 75% approving of legalization, but more than half of Republicans are OK with legalization, too. In 2018, 53% of Republicans believe marijuana should be legal, up from 35% five years ago.
Why it's winning
The female bud of cannabis sativa, marijuana's increasingly winning support because of growing use by patients with various maladies, including cancer, anxiety, and epilepsy.
The successful launches of recreational marketplaces in various states, including Colorado -- one of the first states to pass adult-use laws -- is also overcoming objections. In 2018, marijuana sales already eclipse $1 billion and tax revenue on sales already exceed $200 million in Colorado.
Similarly, Americans are increasingly aware of the benefits associated with shifting marijuana sales away from the black market because of Canada's experience. Canada has been operating a national medical marijuana market for years, and in October, it launched a recreational marijuana market nationwide.
More work to be done
Although Michigan, Missouri, and Utah voters adopted pro-pot laws on Nov. 6, residents in North Dakota voted against adult-use marijuana, suggesting many people remain uncomfortable with the idea of treating marijuana like cigarettes or alcohol.
The margin of victory in Michigan and Missouri also suggests people living in some states may be more comfortable with creating medical marijuana marketplaces than adult-use marketplaces. Michigan's recreational law only passed by a 55%-45% margin, but medical marijuana passed in Missouri by a margin of 65.5%-34.5%.
Despite 33 states having now legalized marijuana in some form, there have been no changes in how marijuana is regulated on the federal level, either. Marijuana remains a Schedule I controlled substance and until that changes, the U.S. cannabis market is likely to remain highly fragmented and hamstrung by obstacles, including inadequate access to banking services and unfavorable tax treatment.
IMAGE SOURCE: GETTY IMAGES.
How big could marijuana sales be?
In Michigan, marijuana sales could climb to $1.5 billion by 2023, based on a study commissioned by the Coalition to Regulate Marijuana Like Alcohol, but the market opportunity is much larger elsewhere. For instance, California's medical marijuana market opened earlier this year, and according to BDS Analytics, cannabis sales in California could total $3.7 billion this year.
Overall, the U.S. marijuana market is valued at about $50 billion per year, including illicit sales, and worldwide, the United Nations values the legal and illegal marijuana market at $150 billion.
The massive size of the marijuana market means there's a lot of opportunity for companies that are involved in growing, distributing, and selling marijuana products, but this market will undoubtedly take time to mature. Nonetheless, Arcview Market Research and BDS Analytics think legal marijuana sales could be $20.8 billion in the U.S. in 2021, and if they're correct, then state and local governments will pocket about $2.8 billion in tax revenue that year.
Given the amount of money at stake in tax revenue and the fact that more Americans believe marijuana should be legal, it wouldn't be surprising if more states follow in the footsteps of Michigan, Missouri, and Utah in the future.
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