“This shows what can happen when politics override the will of the people and causes a stalemate in the rollout of voter-favored programs,” says one industry expert.
By Andrew Ward
Four of the five states that passed cannabis-centric ballot initiatives on Election Day 2020 have since run into hurdles.
The pathway from ballot question to implementation has only been smooth for one of the five states to pass measures recently — Arizona. Adult use sales began on Jan. 22, with many medical dispensaries expanding to adult use to accommodate the newly opened market.
The Copper State sets a new bar by opening its market just a couple months after passing an initiative. Lawmakers from the other four states, however, are stalling the process.
South Dakota Governor Kristi Noem issued a January executive order showing that she ordered a lawsuit to overturn the adult use portion of its results.
Adult use, which passed by a 54.2% to 45.8% margin, was voted into law simultaneously as citizens approved of a medical market that the governor is not opposing.
The governor is joined by law enforcement officers in the lawsuit, and court proceedings are ongoing.
Montana lawmakers aren’t opposing the results of its election. However, they rejected requests from the Department of Revenue to fund the program.
Despite opposition, home grow and possession laws did take effect on New Year’s Day. In the weeks since, amendments were filed to address taxes, their allocation, and product advertising.
There didn’t appear to be much concern from sources in the state, who indicated that implementation is still underway.
Chris Lindsey, a Montana citizen and director of government relations for the Marijuana Policy Project, says the funding rejection was disappointing. Still, the legislative session remains underway.
“We expect that the Governor and the legislature will ultimately make the right decision and uphold the will of the people,” Lindsey says.
Mississippi’s bill is contested by Mary Hawkins, Mayor of the city Madison. The mayor argues that the initiative process was out of date because rules weren’t updated after Mississippi shrank from five to four congressional districts.
Hawkins, who filed her claim days before the election, has since been joined by the American Medical Association and the Mississippi State Medical Association in contesting the ruling. The groups cite risks to physicians and public health as their concern.
New Jersey Governor Phil Murphy is refusing to sign legalization or decriminalization bills in their current states. His objection has been largely over the removal of language regarding underage possession.
He now has to issue a conditional veto seeking changes to the bill or hope that legislators compel themselves to amend the bill to his liking.
Murphy has until Feb. 8 to pass the bill, per New Jersey’s legislative calendar.
Despite his veto threat, Murphy said he is optimistic a bill would pass by the deadline.
Michael McQueeny, counsel for Foley Hoag’s cannabis practice, says the legislature and government are playing “constitutional chicken,” waiting to see which blinks first.
Jessica Gonzalez, a New Jersey-based cannabis and IP attorney for the firm Bressler, Amery & Ross, says the bill does not fully consider all parties.
“While I give credit to legislators who have been actively pushing for a regulated cannabis market, the legislative process did not leave much room for meaningful input from the patients, advocates and communities most harmed by the prohibition of cannabis,” Gonzalez says.
Confidence Among Most Market Leaders
Several cannabis executives did not seem concerned by the developments.
Paul Blair, VP of government affairs for Turning Point Brands (NYSE:TPB), looked toward recent positive news, highlighting Arizona’s efforts.
“That’s the new attainable benchmark for rolling out a regulated marketplace consistent with voters’ interests moving forward,” Blair says.
The state’s existing retail framework helped bring it online quicker than others, he explained.
“What’s clear across the country, though, is that public sentiment is rapidly shifting in the direction of market liberalization,” Blair added.
Others weren’t surprised by delays, saying that is the nature of the industry.
“We are not concerned and, to some extent, not even all that surprised,” ManifestSeven (CSE:MSVN) CEO Sturges Karban says. “The cannabis industry’s history of regulatory reform has often involved starts and stops, persistent political ambivalence, and delays in legislative action.”
Medical Marijuana Inc. (OTC:MJNA) CEO Dr. Stuart Titus also addressed the stalls in New Jersey, Montana and South Dakota.
“This shows what can happen when politics override the will of the people and causes a stalemate in the rollout of voter-favored programs,” he said.
Despite his worries, Titus does see each state eventually passing legislation.