1/11/2023

Midterm Cannabis Results Remind That Progress Is Not Linear

Law360

Authored Article

Lost for many in the avalanche of news about the midterms, voters in five states went to the polls last month to vote on proposals allowing adult-use cannabis, often referred to as recreational cannabis.

We won't bury the lede: two states, Maryland and Missouri, voted to allow adult-use cannabis, while three others — Arkansas and the Dakotas — voted down the proposals.

What, if anything, do the results of these five state elections tell us about the future of adult-use cannabis in other states in the future?

State Proposals

Maryland

First, the Maryland initiative builds from the state's eight-year-old medical-use and possession decriminalization programs.[1] Once in effect, the amendment generally legalizes adult use and possession of cannabis for anyone in Maryland age 21 or older.

The amendment will allow adults over 21 to grow up to two cannabis plants at home and possess up to 1.5 ounces of flower.[2]

It also requires the Legislature to pass laws governing all future regulation of adult-use cannabis, which includes everything from flower cultivation and retail sales to cannabis taxes and licenses. To date, the Legislature has not released a draft of any future cannabis laws.

The amendment — which passed with about 66% of voters in favor and 33% against — adds Article XX to the Maryland Constitution. The new amendment will go into effect on July 1, 2023.

Missouri

Second, and unlike Maryland, Missouri has only had medical-use cannabis for a few years.[3] The new initiative legalizes adult use and possession of up to 3 ounces of flower.

It applies a 6% tax rate to all nonmedical sales. The amendment also creates a microbusiness program, as well as expungement and vacated sentence programs.[4] And at least 144 new licenses will be issued under the amendment.

Missouri's initiative passed by a much slimmer margin than Maryland's, with 53% in favor. The amendment went into effect last month, but Missourians cannot buy adult-use cannabis products until Feb. 6.[5]

Arkansas

And now, the rest of the story.

The Arkansas amendment[6] would have allowed general adult use of cannabis. If passed, the amendment[7] also would have:

Given existing medical cannabis growers and sellers licenses to grow and sell adult-use, nonmedical cannabis;
Authorized 12 additional cultivation licenses and 40 dispensary licenses for adult use of cannabis;
Eliminated the existing sales tax on medical cannabis;
Created sales tax on adult-use cannabis;
Eliminated a cap on how much THC can be in medical cannabis-infused drinks and food portions;
Denied legislators authority to change the amendment without a popular vote; and
Changed the rules for businesses licensed to grow and sell cannabis in Arkansas

The road to the ballot was not smooth for Issue 4. Initially, the Arkansas State Board of Election Commissioners and secretary of state refused to certify the ballot title and popular names for the 2022 midterms.

After an expedited Arkansas Supreme Court ruling in Armstrong v. Thurston last September, the Board of Election Commissioners' decision was overturned, paving the way for the measure to reach the ballot.

But the effort was for naught: The initiative failed with 56% of voters against the amendment. The next vote on adult-use cannabis is likely to hit the ballot in 2024, according to backers of the 2022 initiative.[8]

South Dakota

South Dakota's Measure 27 sought to allow adults over 21 to possess and use up to 1 ounce of cannabis for personal use.[9] The measure also would have allowed households to grow up to six plants and share that cannabis with others if there wasn't a retail cannabis store in their county or municipality.

The measure would have provided regulations for a retail market as well.[10]

The measure failed with almost 53% voting against. This was the closest race among the three failed states.

Another measure on adult-use cannabis will likely be present on 2024 South Dakota ballots.

North Dakota

The North Dakota[11] proposal sought to legalize the production, processing, sale, possession, use and home cultivation of cannabis for individuals age 21 and older.

If passed, it would have added a new chapter to the North Dakota Century Code and created a state entity to regulate cannabis. The new statute would have regulated all facets of the cannabis retail market, as well as individual possession, use and cultivation.

The measure failed, with 55% of voters against Initiated Statutory Measure No. 2. This is the second time an adult-use cannabis initiative has failed in North Dakota; the first was in 2018.[12]

Although another adult-use cannabis proposal could reach the 2024 ballot in North Dakota, there is no preliminary indication whether it will.

Implications

At first glance, it may appear odd that a majority of the proposals for adult-use cannabis failed when there appeared to be nearly universal momentum toward liberalizing cannabis policy throughout the states.

Cannabis legalization is polling at an all-time high;[13] many Americans have used[14] or are familiar with[15] cannabis products; and the U.S. Food and Drug Administration approved the first cannabis-derived medication in recent years.[16] But, like the old clunker you drove in high school, history often moves in fits and starts — progress is certainly not linear.

If anything, these results may serve as a helpful reminder to many in the cannabis industry that nonmedical cannabis is still a controversial topic among many voters. It may be significant that in all three states where the initiatives failed, the medical-use cannabis programs are still fairly young.

Unlike some Western states, where medical-use cannabis has been legal for over two decades, the Arkansas, North Dakota and South Dakota programs are at most four years old.[17]

Since California enacted the first medical cannabis program by ballot initiative in 1996, public perception of cannabis use has changed drastically. That change was slow at first. Even in California, it took 20 years for the state to pass a ballot initiative fully legalizing adult-use cannabis.

But — if polls from the Pew Research Center,[18] Fox News[19] and Gallup[20] can be trusted — the data shows that since the early- to mid-2010s, acceptance of cannabis legalization has grown at a rapid pace.

The three polls cited above, all of which were released within the past three months, show
that a significant majority of Americans support cannabis legalization in some form.

Although this data tracks with our anecdotal understanding that people have become more accepting of cannabis in recent years, there are still some blind spots and hidden variables. A Talk Business & Politics-Hendrix College survey prior to the midterms projected the Arkansas amendment to pass with at minimum a 4% cushion.[21] As noted above, the amendment lost by about 6%.

It seems many voters still see a distinct difference between cannabis for medical purposes and general adult use. The losses in Arkansas and the Dakotas are very likely not the end of adult-use cannabis expansion, in those states or elsewhere.

More time and familiarity with medical-use programs will likely sway enough voters to pass adult-use cannabis programs in those states. To return to an earlier example, even California didn't pass an adult-use cannabis initiative the first time it appeared on the ballot.[22] In the words of The Smiths, "these things take time."[23]

And Missouri may be an outlier as a red state with a very young medical-use cannabis program where adult-use cannabis passed on the first try.[24]

Looking forward, Oklahoma also has an opportunity to legalize adult-use cannabis in March of this year. Oklahoma passed its medical cannabis initiative in 2018, making the state an interesting forum to study what effect — if any — the age of a state's medical cannabis program has on the success of an adult-us initiative there.

Of course, even as some states say stop and others go, go, go, cannabis remains illegal at the federal level under the Controlled Substances Act.

In sum, just because a few initiatives failed this year does not mean we should be ready to say goodbye to expanded adult-use cannabis. Who knows — by 2024 we may be saying hello to federally legal cannabis.

Republished with permission. This article, "Midterm Cannabis Results Remind That Progress Is Not Linear," was published by Law360 on January 10, 2023.

[1] https://mgaleg.maryland.gov/2022RS/bills/hb/hb0001E.pdf.

[2] https://www.wypr.org/wypr-news/2022-11-15/heres-what-to-expect-in-maryland-when-recreational-marijuana-is-legal-in-2023.

[3] https://www.sos.mo.gov/cmsimages/Elections/Petitions/2022-059.pdf.

[4] https://www.kcur.org/politics-elections-and-government/2022-11-09/missouri-amendment-3-election-2022-results-legal-weed-recreational-marijuana.

[5] https://www.kansascity.com/news/politics-government/election/article268484467.html.

[6] https://www.sos.arkansas.gov/uploads/elections/Issue_No._4_.pdf.

[7] https://www.5newsonline.com/article/news/politics/elections/arkansas-issue-4-results-recreational-marijuana/527-59ef2364-80c1-402f-b2f5-07b92d1db7cf.

[8] https://arkansasadvocate.com/2022/11/09/after-issue-4s-failure-whats-next-for-recreational-marijuana-in-arkansas/.

[9] https://sdsos.gov/elections-voting/assets/2022BrendanJohnsonIMAmendingTitle34(SixSections)AGStatement.pdf.

[10] https://www.bhpioneer.com/local_news/recreational-marijuana-will-return-to-ballot-in-2024-proponent-says/article_eb520bc8-6aa8-11ed-b322-070a10fe6294.html.

[11] https://vip.sos.nd.gov/pdfs/Measures Info/Petitions Being Circulated/Cannabis Official Petition.pdf.

[12] https://mjbizdaily.com/north-dakota-on-track-to-defeat-adult-use-marijuana-legalization/.