When cannabis votes don’t become cannabis laws

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The 2020 election ended with all of the voter-approved state ballots legalizing medical cannabis and recreational cannabis. Specifically, adult cannabis has been legalized in Arizona, New Jersey, Montana, and South Dakota. In addition, voters in Mississippi approved medical marijuana, and South Dakota became the first state to approve medical and recreational cannabis at the same time.

November 3rd, 2020 was an exciting day in the cannabis industry, but there is still a lot to be done. Legalizing medical or recreational cannabis through electoral initiative is only the first step. Next, states need to finalize the legal framework for their cannabis programs, and in the past some states have not fully listened to the votes of their constituents in drafting and implementing laws.

We have seen people vote for medicinal cannabis or adult cannabis repeatedly, but what people thought they voted for changed significantly when government officials developed laws to put cannabis programs into action.

In this case, “legal” medical or recreational cannabis programs are introduced with strict restrictions that restrict access for those who voted for legalization in the first place. The many restrictions can also create an imbalance between the supply and demand for cannabis, resulting in increased prices for patients and consumers.

Reality versus expectations in Florida

Florida residents were grappling with this issue after the vast majority of voters cast their ballots in support of Amendment 2 in November 2016. Amendment 2 was a law that would expand the availability of medical marijuana in the state well beyond the 1,800 residents who had qualified for the law by the time.

The problem was that Florida lawmakers seemed determined to merge Amendment 2 with existing cannabis laws, rather than listening to voters and developing a new legal framework. Proponents of Amendment No 2 opposed this mixed approach and identified two main problems.

First, the proposed blending law would limit the number of licensed cannabis producers (who were also the only licensed dealers and sellers in a vertically integrated market system) to the existing seven.

Second, the law that residents voted for would allow doctors to prescribe medical marijuana for debilitating conditions of the same type or class as the nine listed in the amendment, if the doctor believes marijuana use is the potential Health risks predominate. The blending rule proposed by law required that a medical committee approve each of the conditions first. Obviously, these two approaches did not agree.

Fast forward to 2019 and the vertically integrated structure of the state were still causing problems in the Sunshine State. Such a structure has long been cited as a way of creating monopolies and oligopolies for the cannabis industry, but Florida has implemented its cannabis program with mandatory vertical integration throughout the supply chain.

In July 2019, a Florida court ruled that vertical integration was unconstitutional. The case went to the state Supreme Court, where it still contains the latest oral submission dated October 7, 2020. The session ended with the Supreme Court failing to provide a timeline for the decision.

Volatility is the norm in the cannabis industry

Florida wasn’t the first state to encounter delays and surprising changes in the creation and enforcement of cannabis laws. Massachusetts residents voted for legal cannabis in the November 2016 election. On December 29, 2016, the Massachusetts House and Senate passed bill that would delay the opening of marijuana stores in the state for up to six months.

Massachusetts law was passed during informal sessions in both legislatures without public hearing or debate. To make matters worse, only a small number of lawmakers were in attendance when the bill was passed, as many of them were absent for the holidays at the time. Ultimately, marijuana sales in Massachusetts didn’t begin until November 20, 2018.

In Colorado, a different type of volatility has made some marijuana retailers difficult to stay in business. When a law was passed in 2016 requiring pharmacies and growers to have all marijuana products tested, businesses in some communities faced significant challenges. That’s because Colorado’s marijuana dispensaries must obtain state and local licenses to operate. Without both licenses you cannot have your products tested. Unfortunately, some municipalities did not have local licensing systems in place in time to meet the July 1, 2016 deadline of the new law.

The Colorado example discussed above shows that although residents long ago voted to legalize cannabis, the laws actually enacted can cause the industry as a whole to perform very differently than voters would have expected when voting.

However, the problem arises even before state governments have to develop cannabis programs. On November 6, 2018, Wisconsin voters in 16 counties and two cities (which accounts for nearly half of the state’s population) were asked to participate in medical marijuana-related and adult marijuana-related advisory lectures that were on their ballots. Wisconsin residents overwhelmingly voted for these referendums by a margin of two to one, three to one, and four to one. Unfortunately, the referendums were not binding, so they didn’t change any laws themselves.

Can state governments bring together votes and laws?

Law changes are expected while cannabis is still illegal at the federal level, but state and local regulations should always be in the voice of the people. In many cases it did not happen. Voting for medical cannabis or adult cannabis is not always what many voters envisioned.

There are already concerns about new cannabis markets in the states that were legalized on November 3rd. In New Jersey, lawmakers are planning to introduce laws to speed up the recreational market. However, there are concerns that small businesses and minorities may not have enough opportunities to join the market as the 12 existing license holders are expected to automatically qualify for licenses for adult use.

Time will tell which states get it right for their residents, but at least the first step has been completed with four more states approving recreational cannabis and two more states approving medical cannabis during this electoral cycle.

‍ Originally published 1/25/17. Updated on 11/6/20.

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