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Recreational weed is coming to the Buckeye State after Ohio voters approved a ballot measure to legalize adult cannabis use for non-medical purposes. It's a big deal as it makes Ohio the 24th state to approve recreational pot, in addition to Washington, D.C., meaning nearly half of all U.S. states now embrace such a stance. The latest approval also shows how the sentiment is expanding to more parts of the country, like the Midwest, after Minnesota and Missouri approved similar measures over the past year.
Fine print: The passage of "Issue 2" means that people aged 21 and over in Ohio will be able to buy up to 2.5 ounces of cannabis and 15 grams of concentrates. Regarding cultivation, up to six plants will be allowed per person, or 12 plants per household, regardless of the number of adults living in the private residence. Note that the statutory question was decided through a voter-approved initiative, instead of a constitutional amendment via the state legislature, meaning lawmakers in Ohio's General Assembly will have the ability to alter, or even repeal, its provisions. Smoking pot in America is more popular than cigarettes
Recreational legalization is expected to generate hundreds of millions of dollars in annual cannabis tax dollars for Ohio, as well as thousands of new jobs to support the new economy. Cannabis market research firm BDSA even expects legal U.S. cannabis sales to grow 14% to $36.5B by the end of 2023, though investors trying to gain exposure to the sector have not yet seen such promising returns. Multistate operators like Cresco Labs (OTCQX:CRLBF), Curaleaf (OTCPK:CURLF), Green Thumb Industries (OTCQX:GTBIF) and Trulieve Cannabis (OTCQX:TCNNF) have seen negative returns in recent years, as have cannabis-related funds like the AdvisorShares Pure Cannabis ETF (NYSEARCA:YOLO) and ETFMG Alternative Harvest (NYSEARCA:MJ).
Outlook: There has been momentum for legalization at the federal level, with last year's introduction of the Cannabis Administration and Opportunity Act in the Senate and the Marijuana Opportunity Reinvestment and Expungement Act in the House. President Biden also asked the DOJ and HHS to "review expeditiously how marijuana is scheduled under federal law," where it remains a Schedule I drug under the Controlled Substances Act of 1970. The illegal classification on the federal level makes it complicated for companies to operate within their own state borders, as many business activities and banks are regulated by federal law, as well as taxes, trademarks, and legal processes like bankruptcy.