Cannabis and the 2023 election

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The November election is almost a month away and, as in recent years, there are implications for cannabis. Unlike the 2022 congressional midterm elections, where adult-use legalization was on the ballot in five states, the only direct legalization option will be before voters in Ohio next month. Additionally, the Virginia general election and some special elections to fill congressional seats (U.S. House of Representatives) could have a nationwide impact on the industry.

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Ohio

Ohio voters will again have the opportunity to legalize cannabis for adult use, eight years after the first ballot measure to do so failed in 2015. Lawmakers passed a bill in 2016 to create a medical marijuana program with a limited number of temporary business licenses available at the time — including 33 growers, 44 processors and 56 dispensaries. With the increasing number of patients and increasing sales, the number of licenses has also increased over the years. There are currently 38 active and temporary grow operations, 55 manufacturers and over 150 stores. Under the terms of this proposal, the number of licensed stores could nearly triple in less than two years as farmers could obtain up to three store licenses as part of the medical-to-adult-use transition process. Additional licensing and a social equity program would be available after the bill takes effect. Home cultivation (personal cultivation) and local control are part of this proposed measure – while home cultivation has been a common provision in recently legalized markets, there have been some restrictions on local control in other states.

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Virginia

Virginia is among a handful of states where voters will elect the Legislature this year in a closely contested race. The state’s medical cannabis program was launched in 2018 and sales began in late 2020. During the previous legislative session, leaders passed a compromise bill that provided protections for personal cultivation, possession and consumption and established the state’s future cannabis regulatory agency, the Virginia, established cannabis authority. Lawmakers did not shy away from drafting a bill to introduce a legal market, which required further re-ratification and was expected to come into force in January this year. Instead, the rollout of adult use has been widely described as being on hold indefinitely. Recent polls suggest control of the Legislature could flip and expand Democratic control, leading to a new agenda and the necessary votes to pass the legalization bill – although a two-thirds majority to prevent a veto is unlikely.

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congress

This is not a big election year for Congress, but there are a few special elections in November to fill seats vacated by two members of Congress earlier in the year (District 1 in Rhode Island and District 2 in Utah). Normally this is not particularly notable at the national level. Given the razor-thin margins that drove both Speaker Kevin McCarthy’s rise and recent downfall, the long-awaited SAFER Banking Act could face an uphill climb following Senate passage. According to recent polls, none of these seats are likely to be flipped, leaving both factions with the same number of seats as they did at the start of the year.

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Meanwhile, vacancies may impact the calculation of filling the speaker’s chair. The current Speaker Pro Tempore, who is also Chairman of the Financial Services Committee, left the door open to cannabis banking during the lame duck of late 2022. While the Senate works to advance SAFER Banking, the bill’s future in the House is currently uncertain.

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Overall, this election doesn’t present many major cannabis opportunities for voters across the country, but the impact of some elections in Ohio and Virginia could have a significant impact on the future of the cannabis market and business in these two states. Special congressional elections could also have an impact, with upcoming leadership talks and expected committee and meeting activity on banking legislation.

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