Cannabusiness Advisory

Cannabis legalization and program launches have been stalled as states have turned their focus to addressing the ongoing COVID-19 crisis. As was recently discussed on the CannaBusiness Advisory, the State of New York was gearing up to become the 12^th state to legalize recreational cannabis in 2020 and had hoped to accomplish this by April 1^st by including it in the state’s new budget bill that had to be adopted on such date. However, given the COVID-19 outbreak in New York, lawmakers fell under pressure to adopt a new budget while also dealing with the ongoing crisis. In that climate, with lawmakers unlikely to have come to a resolution on the topic, Governor Andrew Cuomo acknowledged that the state would not include recreational cannabis in its budget bill in an announcement on March 31^st. Despite the delay, experts believe recreational cannabis in New York has a good chance of passage as a stand-alone bill prior to the end of 2020.

In Maine, the state’s Office of Marijuana Policy announced on April 10 that it would be postponing its long-anticipated spring 2020 launch of recreational cannabis sales in the state due to the ongoing COVID-19 crisis. While voters passed a ballot measure in 2016 to legalize recreational marijuana, the state’s legislature has spent the time since then battling how to regulate the industry. As the state only started accepting applications to its recreational cannabis program in December 2019, some had hoped that recreational sales would begin this month. However, as the result of the COVID-19 crisis, the Office of Marijuana Policy has suggested that the postponement may now last beyond June.

The stalled legalization efforts resulting from the COVID-19 crisis reach beyond that of the legislature as Missouri’s Missourians for a New Approach campaign, working to gather voter signatures to place recreational cannabis on the November 2020 ballot, has suspended its campaigning efforts. In suspending its efforts, the campaign cited difficulties obtaining signatures as the result of the state’s shelter-in-place order placed on April 3^rd and the state administration’s unwillingness to permit collecting and utilizing online signatures for the ballot measure. Missouri’s failed ballot measure on recreational cannabis runs in addition to the state’s ongoing challenges in launching its medical cannabis program despite being adopted in 2018 by ballot measure.

Despite the current crisis and the resulting stalled legalization and program launch efforts, many are optimistic over the cannabis industries’ long-term potential once the COVID-19 crisis subsides. Such optimism is spurred as the result of 8 of the 11 states where recreational cannabis is legal declaring recreational cannabis as an “essential business”, thereby allowing them to remain open during stay-at-home orders and resulting in skyrocketing sales. According to Cowen, an American multinational independent investment bank and financial services company, weekly cannabis sales in March topped $134 million in California, Washington, Nevada, and Colorado, a 17% increase from the weekly average in 2019. Advocates say that such overwhelming data makes the best case for widespread legalization.