Oklahoma voters rejected a ballot initiative to legalize cannabis for adult use during a special election this month by a margin of 62 percent, surprising many advocates who saw the popularity of the state’s medical market as a promising sign for adult-use expansion. Ultimately, the state’s medical program proved to be good enough for a majority of voters outside Oklahoma City and Tulsa. But the push to expand domestic cannabis legalization in 2023 is far from over.
“For 2024, we’ve calculated Virginia, Maryland, and Oklahoma as quite likely for an adult-use market coming online,” said BDSA co-founder and CEO Roy Bingham.
From the Midwest to the Northeast and the recently-evolving South, there’s no shortage of optimism behind the next few years of market evolution. According to the Pew Research Center, just one in ten U.S. adults believe cannabis should not be legal at all.
Hawaii
Medical cannabis was legalized in the Aloha State in 2000, and more than two decades later, a series of legalization bills seem likely to pass under new vocally pro-adult-use Governor Josh Green. The bills currently are sitting in the state’s Senate, and all eyes are on SB375, which would allow licensed medical dispensaries to begin selling recreational products.
This legalization could have a pivotal effect on Hawaii’s cannabis culture. While 2021 statistics revealed the value of the state’s cannabis market was roughly $240 million, 79 percent of revenues came from the gray or illicit market.
According to the state’s tax working group, “This has created a two-tiered market where the prices in the legal market are much higher than in the gray market. This incentivizes users, even those with a medical card, to make their purchase in the illicit gray market… Laws and regulations that limit scale, market size, competition, and specialization create an unfavorable market structure.”
If approached thoughtfully, a legal adult-use industry might profoundly alter how cannabis is viewed and engaged with in Hawaii. With a 50-percent license fee discount available for qualifying social equity applicants, underground operators are more likely to transition to the legal space with ease and vigor.
Minnesota
Between the Democratic-Farmer-Labor Party controlling both legislative houses and the governor’s office and the strong public backing for SF73, it looks like Minnesota finally may see full cannabis legalization come to fruition. The bill will go through 18 panels in the chamber and, if passed, establish regulations for recreational sales and criminal record expungement.
Not only is the bill backed by key players in the state including Representatives Zack Stephenson (D) and Jessica Hanson (D), but Governor Tim Walz (D) also recently unveiled a budget proposal that includes plans for cannabis legalization funding, along with million-dollar-market predictions for revenue.
Walz’s exploration of possible cannabis revenue makes sense. With a statewide projection of $22.55-billion debt by 2027, the addition of adult-use sales could be a necessary tool to support Minnesota’s budget. The state’s medical market is estimated to earn $125 million by 2025, and establishing a recreational market would significantly bolster that potential.
New Hampshire
New Hampshire’s HB639 recently passed the state’s house with a 234–127 vote, but Governor Chris Sununu remains staunchly opposed to legalization and is likely to veto any bills. The state’s senate also seems unlikely to pass HB639, especially considering similar bills have died at that stage in the previous terms.
Sununu has made it publicly known that he doesn’t expect the bill to make it to his desk this year. And while a few of New Hampshire’s Republican lawmakers have vocalized their support of legal adult-use cannabis, others fully back Sununu.
“I want to make sure that New Hampshire citizens don’t have to go out of state to practice Live Free or Die,” said Representative John Hunt (R), invoking the state’s motto in support of the bill.
Ohio
Ohio has a solid chance of legalizing an adult-use marketplace this year.
The state’s Coalition to Regulate Marijuana Like Alcohol (CRMLA) led the charge for 2022 full legalization, but ultimately decided to postpone its campaign until 2023 due to opposition from Ohio’s GOP leaders.
Potential for legalization currently sits with Ohio’s General Assembly, which has until May 3 to decide whether recreational cannabis will make it onto this year’s ballot.
The likelihood of a recreational market being established in Ohio is promising for state revenue: The medical industry has surpassed $1 billion in earnings since its launch in 2019, and with neighboring legal state Michigan earning $221 million in December alone, the region is sitting on plenty of potential that could be tapped by the end of the year.
Oklahoma
In early March, Oklahoma voters rejected a ballot initiative to legalize cannabis during a special election, with more than 566,000 votes cast. Opposition to Question 820 was strong in rural areas, highlighting the urban-rural cultural divide.
The bill was seen as an easy pivot for the Sooner State that’s home to nearly 12,000 medical cannabis companies — including growers, processors, transporters, dispensaries, testing labs, and various educational and resource facilities — all of which could have pivoted to adult-use products. Approximately 10 percent of Oklahoma’s adult population has registered for the medical program, which appears to be good enough for the majority of the state’s residents, at least for now.
Pennsylvania
While adult-use cannabis has failed to pass in Pennsylvania in the past, this year could be different.
Democrats are in control of the Pennsylvania House of Representatives for the first time in more than a decade, and with Democrat Josh Shapiro seated in the governor’s office and some staunch Senate support, the industry is very optimistic about the Keystone State.
The state is home to more than 9 million adults over the age of 21 — and those who want to consume or possess cannabis have to qualify for Pennsylvania’s strict medical guidelines. As of May 2022, there are more than 700,000 registered patients and 37,000 registered caregivers in the state’s medical program, according to the state’s department of health.
Kentucky
Kentucky Governor Andy Beshear signed an executive order on November 15, 2022, permitting qualifying Kentuckians to purchase small amounts of medical cannabis. The order allows patients with certain conditions to possess up to eight ounces of cannabis at a time.
“Kentuckians suffering from chronic and terminal conditions are going to be able to get the treatment they need without living in fear of a misdemeanor,” said Beshear. “With 37 states already legalizing medical cannabis and 90 percent of Kentucky adults supporting it, I am doing what I can to provide access and relief to those who meet certain conditions and need it to better enjoy their life, without pain.”
HB47 was introduced in the state a few months later, potentially decriminalizing up to an ounce of cannabis for personal use — and the proposed HB22 and SB51 would establish a Cannabis Control Board to support medical and adult-use markets.
As medical cannabis is just dipping its toes into the state, further amendments seem like a tall order for 2023, but if the bills pass, medical and recreational markets could be established by July 2024.
The Carolinas
North and South Carolina are two of the few remaining holdouts with no form of legal cannabis, but that may change in 2023.
U.S. Representative Nancy Mace (R-SC) is a huge advocate for South Carolina medical cannabis legalization in Congress. She plans to reintroduce her States Reform Act this year, which seeks to remove cannabis from its Schedule I classification.
In North Carolina, SB3 would establish a medical cannabis market in the state and is currently advancing through legislative committees in the house after passing the senate with a vote of 36 to 10. The bill is sponsored by Senator Paul Lowe (D) along with Republican Senators Bill Rabon and Michael Lee.
