A state-by-state updated look at where marijuana is legal
America sees green – and I’m not just talking about the huge gains in investor portfolios. We are seeing a cannabis revolution in the United States that is gathering momentum at an extraordinary rate, which could very well allow marijuana to be one of the fastest growing industries of the 2020s.
This revolution begins with Americans across the country. According to the national pollster Gallup, an all-time high 68% of respondents wanted cannabis legalized nationwide in its 2020 survey. This is up from 66% in the previous two years, and that effectively doubles the support for legalization seen two decades earlier.
However, whether you can buy cannabis products or not, it depends on where you live or where you shop. Here is an overall look at where each of the 50 states stands on marijuana today.
These states have legalized consumption and sale of weeds for adult use, with medical pot
There are currently 18 states whose residents have voted to legalize cannabis for adult use, or whose legislature has passed a bill to green light its consumption and / or sale. But as of June 23, 2020, only 11 of those 18 states legalized for recreational use had functioning dispensaries selling cannabis for adult use. These 11 states are (in alphabetical order):
Most of these 11 states are long-established markets, with Washington and Colorado starting selling adult products in 2014, followed by Oregon in 2015, Alaska in 2016, Nevada in 2017 and California and Massachusetts in 2018.
California is the world’s largest cannabis market in terms of annual sales, with $ 4.4 billion in cannabis revenue in 2020. This represented around 27% of legal cannabis sales in the United States last year.
These states have accepted recreational and medical pot, but adult sales have yet to begin
As the aforementioned 11 states rake in recreational cannabis revenue, seven states wait behind the scenes for their chance to start ringing the registry. These states are (again, in alphabetical order):
- New Jersey
- New Mexico
- new York
Since the November elections, we have seen a wave of legalizations. New Jersey, New York, New Mexico, Virginia, and Connecticut have all signed legislation to legalize recreational marijuana in the past four months.
However, it may still be some time before sales begin in these states. For the Montanans, January 1, 2022, is the day they will be given the green light to buy recreational grass. Meanwhile, Virginians appear to be waiting until January 1, 2024 to purchase adult cannabis products. Yet the wait is even longer for Vermonters. Even though consumption was legalized in July 2018, retail sales are not expected to start until October 2022, at the earliest.
Pot for adult use is illegal in these states, but medical marijuana has the green light
In addition to the 18 states that have allowed recreational marijuana, there are 18 other states that allow doctors to prescribe cannabis to patients. Keep in mind that the qualifications for the approval of medical cannabis may vary depending on the legalized state. Although recreational pot is banned, medical access to marijuana is ongoing in these states (listed in alphabetical order):
- New Hampshire
- North Dakota
- Rhode Island
- South Dakota
- West Virginia
Perhaps the biggest surprise on this list could be South Dakota. Even though residents voted to legalize medical and recreational weeds in the November election (via two separate measures), the state Supreme Court overturned the adult-use weed amendment. Likewise, you’ll notice that Mississippi no longer appears in this section following its Supreme Court’s overturn of voter-approved Initiative 65, which legalized access to medical cannabis for some patients.
Even though the customer base for medical herb is smaller than adult cannabis, some states can still be huge money generators. By 2024, Florida is expected to have third-highest annual pot sales in the United States
Recreational and medical marijuana is completely illegal in these states
Finally, there are 14 states that have legalized neither recreational cannabis nor medical marijuana. In alphabetical order, these states are:
- North Carolina
- Caroline from the south
These 14 states generally have two things in common. For starters, they are often led by Republican lawmakers. According to the 2020 Gallup poll, only 48% of self-identified Republicans were in favor of legalizing cannabis nationally. This compares to 83% of self-identified Democrats.
The other thing in common is that many of these states do not have the initiative and the referendum process. In simpler terms, this means that residents must defer to their state’s legislature to initiate changes on the cannabis front. With Republicans in charge in many of these states, the momentum to push for cannabis reform is simply not there.
Cannabis stocks will see green
With nearly three-quarters of the country now legalized to some extent, we’ve reached the point where federal cannabis reform is no longer necessary for marijuana stocks to thrive. As long as the federal government allows states to make their own laws and regulate their own cannabis industry, multi-state operators (MSOs) have a very good chance of profiting from the cannabis boom.
The easiest way for investors to get rich from cannabis is to focus on MSOs that have or close to recurring profitability, as well as those with clearly defined or unique growth strategies.
For example, Trulieve Cannabis (OTC: TCNNF) tick all that apply. It has achieved 13 consecutive profitable quarters and offers one of the most unique growth strategies. Of the 91 active dispensaries in Trulieve, as of June 23, 2021, 85 of them are located in Florida. By saturating the Sunshine State, Trulieve was able to effectively grow its brand without spending a fortune on marketing.
Planet 13 Holdings (OTC: PLNH.F) is another MSO which must check all applicable boxes. Although not yet profitable, Planet 13’s rapidly growing sales are poised to be profitable on a recurring basis. The crazy thing is that there is only one operating dispensary at the moment, even though it is a doozy. The SuperStore in Las Vegas, Nevada spans 112,000 square feet and includes an event center, consumer fulfillment center, café, and plentiful retail space. In other words, Planet 13 has become a must-see destination for cannabis tourists. By the end of the year, a second department store will open in Santa Ana, California.
The point is: the arrow for jar stocks points higher with each new state-level legalization in the United States
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.