Marijuana laws are changing at a rapid pace across the country. Since 2012, 15 states and Washington, DC have legalized marijuana for adults over the age of 21. In total, 43 states have legalized medicinal or recreational use of marijuana. New Jersey, Arizona, Montana, and South Dakota in their November elections are the most recent states to legalize recreational cannabis. In addition, Mississippi backed the creation of a medical cannabis program. The top marijuana advisor to New York’s Governor Andrew Cuomo says cannabis legalization legislation will again be introduced through the state budget with the goal to enact reform by April.
Why Legalize Marijuana?
Marijuana is big business. The U.S. cannabis industry is currently worth an estimated $54 to $67 billion and includes dispensaries, cultivators/growers, processors/manufacturers, testing laboratories, and others. According to CNBC, in 2019, Colorado passed $1 billion in marijuana state revenue since its legalization in 2014. California surpassed $1 billion in marijuana tax revenue just two years after statewide legalization.
More Americans Say Legalized Marijuana is Okay
Public sentiment has also changed. A Gallup Poll showed 68% of Americans support the legalization of cannabis. In addition, in an article published in Marijuana Moment, Karen O’Keefe, director of state policies at the Marijuana Policy Project (MPP), said that “November’s clean sweep of marijuana initiatives will help propel neighboring states’ legislatures to get their own bills past the finish line in 2021. These victories—in blue, red, and purple states—reflect the overwhelming popular support for legalization and a huge missed opportunity for states that fail to act.” In New Jersey, for example, voters by a margin of 2 to 1 passed a constitutional amendment to legalize the possession, use and sale of cannabis for recreational purposes for people over 21.
On the Federal Front
Although an increasing number of states are legalizing the use of recreational marijuana, it’s still illegal on the federal level. This may be changing as well. The House of Representatives passed a bill in December to legalize marijuana with no real chance of getting through the Senate. However, with a shift in the political landscape, some see cannabis-related legislation — like the STATES Act or MORE Act — as now having a potential chance of passing through Congress. But this is far from certain. If the use of marijuana does become legal on the federal level, it would usher in the passage of cannabis banking reform and open the industry to capital markets.
The Explosion of CBD Products
In the meantime, CBD (Cannabidiol) products have taken the market by storm, everything from tinctures to help with anxiety, chronic pain, insomnia, and depression to post-workout smoothies, lotions, supplements, and much more. CBD is derived from the hemp plant, a cousin of the marijuana plant, and has been touted for its health and wellness benefits. According to the World Health Organization (WHO), CBD “exhibits no effects indicative of any abuse or dependence potential,” which is one of the reasons for its popularity.
Another reason behind the CBD explosion is the passage of the Farm Bill in 2018, which removed the hemp plant from the list of “Schedule One” federally controlled substances. This legalized the cultivation and sale of hemp at the federal level and enabled hemp producers and businesses that deal in hemp and hemp-derived products, like CBD, to be free to pursue opportunities more aggressively. Market research by BDS Analytics and Arcview Market Research projects that the collective market for CBD sales will surpass $20 billion by 2024 in the United States alone. The cannabis industry continues to evolve in the face of conflicting state and federal regulations. The insurance industry has stepped in to provide specialized coverage to the budding cannabis and CBD-related businesses – from Liability to Property insurance and other product lines.