Cannabis on the Ballot: Five States Consider Legalization Amid Promise for Federal Reform
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Cannabis on the Ballot: Five States Consider Legalization Amid Promise for Federal Reform

Brownstein Client Alert, Oct. 19, 2022

President Joe Biden’s momentous announcement last week that he would take executive action to pardon federal convictions for simple cannabis possession, coupled with a promise that his administration would review cannabis scheduling under the Controlled Substances Act (CSA), created many waves across the country. Biden’s executive order, along with the steady increase of state-legal cannabis, could lead to significant shifts in the federal cannabis landscape in the coming years.

Within an hour of the president’s announcement, the U.S. Department of Justice (DOJ) issued a public statement that said the agency would “expeditiously” administer the director to review cannabis scheduling classification, while the U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra tweeted about “looking forward” to working with DOJ on the review. Still, federal cannabis reform has been slow and still lacks the momentum needed for full federal legalization, despite efforts made by lawmakers from states that have legalized the substance.

In the meantime, 19 states and the District of Columbia have legalized recreational cannabis, and an additional 18 states have legalized medical use. As the 2022 midterm elections approach, a cannabis legalization question will appear in five states: Arkansas, Maryland, Missouri, North Dakota and South Dakota.

Below is a brief overview of the cannabis legalization ballot measures that constituents will vote on in each of those states on Nov. 8, 2022.

  • Arkansas. Through a proposed state constitutional amendment known as the Arkansas Adult Use Cannabis Amendment (Issue 4), voters will weigh in on whether to allow adults 21 and older to purchase and possess up to an ounce of cannabis. Although, consumers would not be allowed to grow their own plants. The measure would come with a 10% sales tax, with portions of the tax revenue going to law enforcement and the state’s medical school. Additionally, the amendment would increase the number of licensed cultivation facilities in the state from eight to 20. The existing eight facilities would be able to cultivate an unlimited number of plants, while the 12 new facilities would be capped at 250. The state would issue a total of 120 non-medical dispensary licenses, with 80 going to 40 existing medical cannabis dispensaries that would then be authorized to sell recreational cannabis at their existing locations and also open second locations for commercial sales only. The additional 40 licenses would go to businesses chosen by a lottery. A recent poll found that 58.5% of voters support the amendment.
  • Maryland. As a legislatively referred constitutional amendment, Question 4 asks Maryland voters if they support guaranteeing the right to use cannabis for adults, subject to further regulation by the state General Assembly. House Bill 837, which would immediately go into effect upon voter approval of Question 4, would permit adults age 21 and older to legally possess as much as 1.5 ounces of recreational cannabis or 10 grams of cannabis concentrate, grow two plants at home out of public view and create cannabis business assistance funds and community reinvestment and repair funds. House Bill 837 would also require Maryland to conduct a study on the impact of legalization, focusing on health and business disparities, with the latter supporting an effort to understand how best to support women- and minority-owned businesses’ entry into the industry. Because the regulations would not establish a commercial licensing system or regulatory framework or impose any excise taxes on cannabis sales, the passage of Question 4 would not fully establish a commercial recreational cannabis market in the state. The measure is polling highly favorably with 73% of Maryland voters in support.
  • Missouri. In Missouri, through Amendment 3, voters will decide whether to allow adults 21 and older to purchase and possess up to three ounces of cannabis. The measure would also imposes a 6% sales tax on recreational cannabis and permit adults to grow up to six flowering plants, six immature plants and six clones at home if they obtain a registration card. The state’s Department of Health and Senior Services would lead the state’s licensing program and issue at least 144 microbusiness licenses through a lottery system, which would prioritize low-income applicants and communities disproportionately impacted by drug criminalization. Recent polling shows support for Amendment 3 leading in the polls, but with only 48% of Missouri voters in favor while 17% remain undecided.
  • North Dakota. Although voters soundly rejected an adult-use legalization referendum in 2018, the question is back on the ballot with changes intended to address the concerns of those who previously voted against the measure. In this year’s election, North Dakota voters will be asked whether to legalize the use and possession of up to one ounce of cannabis, four grams of concentrate or 500 milligrams of cannabis-infused products for adults 21 and older. The measure would also allow adults to grow three plants in a private residence, not visible from public spaces. In addition to local taxes, the measure would impose a 5% sales tax on cannabis and limit provisions to restrict the state from only issuing seven cultivation licenses and 18 dispensary licenses. Measure 2 empowers local jurisdictions to prohibit cannabis businesses from operating in their district, an increasingly common provision in legalization measures. If enacted, the amendment would require that the state establish a framework for growers, manufacturers, retailers and testing labs. A recent poll found support for the measure weak with only 39% of voters supporting the proposal, 43% opposing and 18% undecided.
  • South Dakota. South Dakota’s measure poses one of the most legally and politically interesting circumstances, given it is somewhat of a do-over, but not because legalization did not pass the first time. In 2020, voters approved legalization with 54% of the vote. However, Republican Gov. Kristi Noem challenged the referendum, and the state Supreme Court ultimately invalidated the amendment, concluding that the measure violated the state’s single-subject rule. To avoid similar consequences, the 2022 ballot measure allows the state legislature to set and finalize tax and regulation standards. The measure would allow adults 21 and older to purchase and possess up to an ounce of cannabis and permit adults to grow up to three plants at home for personal consumption. Recent polling shows 54.4% of South Dakota voters oppose legalization, and only 43.8% support it. However, advocates are questioning the polls’ accuracy, pointing to drastic polling differences coming out of the same areas just two years ago.

Campaigns in other states did not make this year’s ballot. In Ohio—following concerns regarding a legal challenge over the timing of when activists submitted petition signatures for a legalization measure—activists, the Ohio Secretary of State’s Office and legislative leaders reached a compromise paving the way for voters to see cannabis legalization on their ballots in 2023. And in Oklahoma, the state Supreme Court denied the legalization effort a spot on the November ballot because the court has yet to resolve two public protests against the measure. Time ran out on the proposal for this election cycle partially due to delays stemming from new software the Oklahoma Secretary of State’s Office used to verify petition signatures. However, on Oct. 18, 2022, Gov. Kevin Stitt issued an executive setting a special election for March 7, 2023, in for voters to consider cannabis legalization.

Several campaign groups in other states are already planning for the 2024 elections. In Wyoming, activists reported progress this year on collecting signatures for a pair of ballot initiatives to decriminalize cannabis but have said that they are turning their focus to 2024. And similarly, in Nebraska, setbacks this year to a medical cannabis campaign led to talks of convening a special legislative session but proponents are looking to the 2024 ballot instead.

Whatever the results of this year’s midterm elections, there has been a sea change in cannabis legalization over the last decade. With even traditionally red states considering cannabis measures and President Biden’s recent executive order, full federal legalization seems more possible than ever. But until then, the legal cannabis industry still faces a muddle of conflicting state schemes and federal prohibition, significantly impacting business operations and banking opportunities.

Election Day is less than three weeks away. Contact one of the attorneys below to navigate issues related to cannabis policy changes and the election results.

This document is intended to provide you with general information regarding cannabis ballot initiatives. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.

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