On November 3, voters in five states overwhelmingly approved ballot measures to legalize medical or adult-use marijuana and impose taxes on marijuana sales ranging from 6.6% to 20%. In New Jersey, Arizona, South Dakota and Montana, voters approved referendums legalizing recreational marijuana use for anyone at least 21 years old. Voters in South Dakota also approved a ballot measure to legalize medical marijuana, as did voters in Mississippi.

Also, in California, where cannabis had already been legalized, voters approved a range of local cannabis ordinances and tax measures that renew support for legal cannabis in the state. While it has been four years since California voters legalized recreational marijuana, a majority of cities and counties continue to ban cannabis at the local level due to concerns about public safety and negative publicity.

As legalization is accepted in more states, it creates certain challenges for our industry. It can make it more difficult to find employees able to pass a drug test, and the proliferation of marijuana certainly has safety implications. Employers should be certain they have a policy in place that complies with the laws on the books in their state and consider if legalization in their states impacts their typical hiring process.

What it means

The results of the ballot measures should come as no surprise given the recent results from Gallup’s annual poll measuring the public’s views on marijuana legalization. According to the poll, “Americans are more likely now than at any point in the past five decades to support the legalization of marijuana in the U.S.” The 68% of adults who support legalization is double the 34% who supported legalization in 2003, and shows a dramatic change in support since Gallup first measured the public’s views in 1969, when only 12% backed it.

The results from November also show that red states are joining blue states in pursuing legalization. Voters choosing to overturn their state marijuana laws in Montana, South Dakota and Mississippi also backed the re-election of President Trump and chose to elect Republicans to statewide office fairly decisively. This is a rapid sentiment change among Republicans, especially in South Dakota where a medical-marijuana ballot initiative failed in 2010 with 63% of voters against – a complete reversal to November 2020, when voters approved the initiative with 69% in favor. The vote in Mississippi adds that state to a collection of other Republican states – Arkansas, Louisiana, Utah and Oklahoma – that have backed legalizing medical marijuana.

The continued push at the state level for cannabis legalization has resulted in 35 states legalizing medical marijuana, which includes 15 states that also have legalized its recreational use. That now means that more than one in three Americans will live in states where cannabis is legal for adult use while cannabis remains illegal under federal law. And it is expected that this trend will grow in the coming year, as states grapple with funding pitfalls resulting from the COVID-19 pandemic.

For instance, Governor Cuomo of New York predicted that the state legislature will pass a legalization bill in the upcoming legislative session, “because the state is going to be desperate for funding… and it’s also the right policy” – a sentiment likely shared by other states surrounding New York that may lose out on potential tax revenues from marijuana sales.

Can state change compel federal changes?

While states will continue to pursue various avenues toward legalizing marijuana, the bigger question is whether Congress and the federal government will attempt to mitigate the disparity between federal and state marijuana regulation now that the issue appears to be less partisan than it has been in the past.

Last September, the House of Representatives passed H.R. 1595, the Secure and Fair Enforcement Banking Act of 2019 (SAFE Banking Act) by a large bipartisan majority of 321 to 103. While the bill doesn’t legalize marijuana, it addresses specific legal consequences of marijuana’s Schedule I status by enabling marijuana businesses to access banking services. Many financial institutions remain reluctant to openly enter into relationships with state-authorized marijuana businesses due to the Schedule I status of marijuana. While the legislation ultimately ended up stalling in the Republican-controlled Senate, advocates of legalization are buoyed by the fact that the latest ballot victories in the Republican-
heavy states of Mississippi, Montana and South Dakota could motivate their Republican senators, including Majority Whip John Thune (R-SD), to endorse policy changes that will help their home states.

When it comes to potential administrative actions that a president-elect Biden would pursue, it is likely he would instruct the Department of Justice (DOJ) to reissue guidance memoranda from the Obama administration indicating that the federal government will defer to states that have legalized marijuana to enforce prosecution activities according to their own narcotics laws.

Next steps

On November 9, Majority Leader Steny Hoyer (D-MD) sent a letter (find a link to this letter in the digital version of this article online at tcimag.tcia.org) to his colleagues announcing that the U.S. House of Representatives will vote in December 2020 on H.R. 3884, the Marijuana Opportunity Reinvestment and Expungement Act of 2019 (MORE Act). The federal legislation removes marijuana from the list of scheduled substances under the Controlled Substances Act and eliminates criminal penalties for an individual who manufactures, distributes or possesses marijuana.

While this legislation is unlikely to move in a Republican-controlled Senate, TCIA will be watching that vote to see whether American sentiment for legalization, especially in red states, will result in some Republicans crossing the aisle to vote for its passage. General levels of support for the vote may dictate additional policies that a Biden administration might pursue – vice president-elect Harris is the main sponsor of the legislation in the Senate.

Basil Thomson is a senior associate at Ulman Public Policy, TCIA’s Washington, D.C.-based advocacy and lobbying partner.