Your Cannabis Legalization Outlook for 2020

You know from our cannabis coverage that legalization is one of the biggest catalysts for profits. And 2020 is going to be huge for both legalization efforts and profit opportunity.

So going into this key election year, I want to help you all be the most informed cannabis investors in the nation.

Here's where we are: Currently, 33 states and Washington, D.C., have legalized medical marijuana, while recreational cannabis is legal in 11 states and Washington, D.C. That means some form of cannabis is legal in 44 states, plus the capital.

Now, there are 10 states I have my eye on that are most likely to legalize marijuana in 2020. Each one could crack open the U.S. cannabis market a little wider in 2020, giving us plenty of moneymaking potential.

I was already excited about these prospects - and a recent development in Michigan is giving us even better news about what next year has in store...

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Michigan's Key Role in Legalization Efforts

Recreational cannabis sales started in the Great Lakes State on Dec. 1.

You likely heard about the lines around the block and the shops running out of cannabis to sell. You've also probably heard that in the first week of sales, with just a handful of businesses operating, Michigan collected over $270,000 in tax revenue from $1.6 million in sales.

By 2021, recreational sales could reach $1.5 billion.

And while I love seeing that, there's more to this story, and it starts with voters.

Two years ago, those working to legalize recreational cannabis in Michigan needed 365,000 valid signatures to put a legalization measure on the 2018 ballot. Those signatures were submitted in November 2017 and were certified in April 2018. State lawmakers had a chance to pass the measure, but they left it up to voters.

And thanks to the efforts of everyone working together, Michigan voters stood up and had their voices heard across the nation. Just to make sure everything rolled out smoothly, regulators even cut their holiday weekend short.

The even better news is that this bodes well for rest of the states that are trying to legalize some form of cannabis use in 2020...

The East Coast Legalization Outlook in 2020

Voters around the country are telling their elected officials they want recreational marijuana legalized.

If those chosen to represent us want to keep their jobs after 2020, they'd better listen.

Disagreements halted progress in recreational legalization in both New York and New Jersey in 2019, but that's not going to be the case next year.

In fact, New Jersey lawmakers had been debating legalizing cannabis for two years, killing proposals left and right. The governor wanted it, but half of the legislature didn't. And they'd struggled to find a resolution for years until now. It's finally in the hands of New Jersey voters.

And if he decides to run again in 2021, Governor Phil Murphy (D-NJ) would also have a tough go if recreational cannabis use isn't legalized in the Garden State.

What's more, the numbers prove New Jersey voters are fully on board with legalization. A Monmouth University poll found that 68% of New Jerseyans agree with legalizing recreational marijuana.

Then there's New York. In a poll from Siena College given to New Yorkers, 56% of the respondents agreed that cannabis should be legalized.

Governor Andrew Cuomo (D-NY) is likely to seek a fourth term in 2022. If he doesn't get cannabis legalization done soon, the voters are going to remember.

This is also great news for cannabis tourism on the East Coast. It will expose the cannabis industry to destinations like Atlantic City and the rest of the Jersey Shore.

Outside of New York and New Jersey, Arizona has three potential ballot measures in play. And that's no surprise...

These Cannabis Voters Are Heading to the Polls

Arizona is home to a number of growers and manufacturers of medical marijuana that could benefit from full legalization.

The state will also face pressures from other Southwestern states such as California, Colorado, and Nevada, where "cannabis tourism" has taken hold. They don't want to be left out of the tourism boom.

Arizona will leave marijuana legalization up to its citizens next November. A poll showed a majority of 52% of Arizonians in support of legalizing recreational marijuana.

In Arkansas, the Arkansas Recreational Marijuana Initiative could be up for a vote on Nov. 3, 2020 - along with two other potential measures gathering signatures.

Voters in this state are slowly being convinced toward recreational legalization. In a 2016 poll, after medical marijuana was legalized, citizens were asked about legalizing recreational marijuana. Up to 70% were against it. In a similar poll last year, the number fell to 53% against recreational marijuana legalization.

That's progress, but it's gradual. Arkansas favored marijuana for a while, so it may only be a matter of time before full legalization.

On the other hand, Florida has no less than four ballot measures collecting signatures for recreational marijuana.

As of last month, the Make It Legal Florida ballot initiative received 313,000 signatures and is headed for judicial review. It needs 766,200 by February to be on the ballot for the 2020 elections.

Florida is most likely the next state to legalize recreational marijuana, with 64% in support, according to a University of North Florida study.

The Sunshine State's also having the second-highest average daily growth in medical marijuana patients per day. This indicates a sentiment more in favor of marijuana than the stigmatic position maintained by other southern states.

Next up is Missouri, which legalized cannabis for medical purposes a year ago, and a new movement is emerging this year to catch up with pot laws in neighboring Illinois. But the state is moving slowly, making it our least likely state to expand marijuana laws in 2020.

Despite legalizing medicinal marijuana, the citizens of Missouri are still waiting to use their medical marijuana cards. The state has approved over 17,972 patients for medical marijuana as of November, but those patients will have to wait until January 2020, when the state awards licenses to the dispensaries.

Meanwhile, a group is collecting signatures for Missouri's sole ballot measure, the Marijuana Legalization and Expungement Initiative. It needs 160,199 signatures by May 3 to make it on the 2020 ballot.

A whole 65% of voters helped legalize medical cannabis a year ago. But again, this was only a year ago, so it makes you wonder if proposed full legalization will take so quickly.

South Dakota currently has two potential ballot measures in motion, one for medical and one for adult recreational use. They both have significantly more than the required signatures.

The medial petition has gathered 30,000 signatures, nearly twice the 16,961 necessary for a ballot initiative. Over 50,000 signatures have been submitted for recreational use, more than the 33,921 needed for a ballot initiative.

There have been many attempts to make this happen in South Dakota over the last decade - either stopped by lawmakers or a lack of signatures. But sentiment has shifted significantly in recent years.

A shift in South Dakota could be the linchpin for federal marijuana reform. It's historically one of the most restrictive states for all forms of marijuana. But it has the opportunity to completely turn that around in 2020, when most presidential candidates are pro-legalization.

If marijuana ends up on the ballot, majority support for legalized marijuana could see these measures through. But of course, with the way it's gone in other states, medical marijuana is more likely to arrive first.

Its neighbor, North Dakota, legalized medical marijuana in 2016, after failing to do so the year before. In 2020, it'll try to move the needle another notch.

The North Dakota Marijuana Legalization Initiative, its only marijuana ballot measure, would allow for legal recreational use of marijuana for anyone over 21. It's currently in the signature-gathering phase, needing over 26,000 signatures by July 2020 to get on the ballot.

In Mississippi, a group called Mississippians for Compassionate Care collected over 214,000 signatures in support of legalizing medical marijuana. The Mississippi Medical Marijuana Amendment of 2020 is the only potential marijuana-related ballot measure in 2020. And it looks like it's headed for the voting booth.

About 67% of Mississippians support medical marijuana legalization. That means if it's up to the voters, there's a strong likelihood it will pass. This will be huge for the cannabis industry, and it will create ripples in the more conservative southern states.

The second to last state on the list is Idaho. Idahoans right now have one potential ballot measure collecting signatures for legalizing medical marijuana. Weed is still very criminal there - anyone possessing it can land five years in prison and a $10,000 fine.

So why are we talking about it? The state is surrounded by legal marijuana. Montana, Oregon, Nevada, Washington, Canada, and Utah have all legalized it for recreational or medical use.

Something's gotta give...

Right now, just 43% of Idahoans support legal recreational marijuana. But a whole 73% of Idahoans support medical marijuana, which is a start for a state that's shut it down in recent years. As Idaho makes headway on medical marijuana sentiment, don't be surprised if its Medical Marijuana Initiative succeeds in 2020.

And last but not least, we have Nebraska, which has a whole of two marijuana petitions in play. State lawmakers have thrice rejected medical marijuana bills. But the group Nebraskans for Sensible Marijuana Laws claims to be picking up steam with its Medical Marijuana Initiative for 2020.

There's also a Cannabis Legalization Initiative, which would make cannabis use a constitutional right in the state. But this is less likely to pass. The medical measure currently has over 15,000 of the 122,000 signatures needed by July 2020. If it ends up on the ballot, there's a potential 77% of Nebraska voters in support of medical marijuana, according to a survey by the Marijuana Policy Project.

So in spite of the slower progress in some states, the point is that there are efforts all around the country to legalize recreational cannabis, even in states like South Dakota.

On Nov. 3, 2020, we're going to see the true power of the will of the people.

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About the Author

Greg Miller started working on Wall Street in September, 1987, just a month before the “Black Monday” stock market crash.

During his career there, he became an expert in just about every kind of publicly traded security - from blue-chip and small-cap stocks to municipals, junk bonds, and derivatives. As a portfolio manager, Greg was responsible for over $500 million of assets in mutual funds and insurance company accounts.

After leaving the Street, he designed a successful options trading strategy and made lucrative tech investments for a financial publication. He has also helped develop new products and worked with other editors to hone their strategies.  He’s always been dedicated to deep, fundamental research - and he always will be - because he believes buying the very best companies at the right price is the best way to amass wealth in the stock market.

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