Industry pundits mostly praised the mixed results for cannabis votes in Tuesday’s midterm elections, as Maryland and Missouri became the 20th and 21st U.S. states to allow adults over 21 to buy cannabis.
Measures failed in Arkansas, South Dakota and North Dakota, however.
The results marked a marginal gain for the adult-use cannabis industry, which continues to roll out in more U.S. states.
Also Read: Maryland, Missouri vote to legalize recreational cannabis, while 2 states reject measures
Cowen analyst Vivien Azer said the “cannabis green wave hit a wall” with defeats in the three states.
Maryland and Missouri only represent about 3.8% of the U.S. population over 18 years old, but they add to the growing count of states allowing adult-use cannabis, she said.
“It’s worth noting that as the industry has moved to penetrate deeper ‘red’ states, even measures that failed saw support consistently over 40%,” Azer said.
Joe Caltabiano, co-founder of Cresco Labs
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and the JSC FUnd, said one of the best outcomes of the election is that it will boost the number of U.S. Congress members from states with adult-use cannabis.
“Federal reform…will provide security for these workers, fairness for cannabis businesses and confidence for the investors who need a clear roadmap to continue support of the industry’s growth,” Caltabiano said in an email to MarketWatch.
One of the key measures on the table for Congress is the SAFE Banking bill — also called the Safe Plus Banking bill to open up the financial system to cannabis companies.
Shares of Cannabis companies have been weak this year amid dim prospects for federal legalization. U.S. cannabis companies have continued to grow their revenue as more adult-use programs have gotten underway around the country.
The AdvisorShares Pure US Cannabis ETF
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is down 57.2%, compared to a 32% drop by the Nasdaq
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Missouri marks the second state that backed Donald Trump in the 2020 elections to allow adult-use cannabis, as the issue drew support from Republicans as well as Democrats. Alaska, which allowed adult-use cannabis, voted for Trump in 2020 while Arizona, a swing state that went to Biden, also permits cannabis use and purchases for adults.
With 89% of the vote counted, 53.1% of voters OK’d the adult use measure in Missouri, and 46.9% voted no.
Maryland — historically a Democratic-leaning state — delivered on expectations for a wide victory for cannabis. The Associated Press called the election at 9:33 p.m. Eastern with a roughly two-thirds majority in favor.
The cannabis initiatives fell short of the clean sweep of states with ballot initiatives in the 2020 election.
This year, voters pushed back against cannabis in the more conservative states of Arkansas, South Dakota and North Dakota.
In Arkansas, 56% of voters opposed adult-use cannabis and 43.8% supported it. About 55% of the voters in North Dakota voted against cannabis, while roughly 54% did so in South Dakota.
Companies with exposure to those medical markets include Curaleaf CURLF in Arkansas, Maryland and Missouri; Verano VRNOF in Arkansas and Maryland; Columbia Care CCHWF in Maryland and Missouri; and Green Thumb Industries GTBIF, GTII, in Maryland, said BTIG analyst Jonathan DeCourcey.
Other companies poised to benefit include MariMed Inc. MRMD and Trulieve Cannabis TCNNF both of which operate in Maryland.
