Two weeks ago, cannabis emerged as the big winner in the November 3rd election as voters in New Jersey, Arizona, Montana and South Dakota voted to legalize adult-use marijuana while Mississippi approved the sale of medical cannabis. To make this victory even sweeter for this space comes a new bullish forecast from New Frontier Data, a leading cannabis researcher, which estimates that the U.S. market will pull in $38.3 billion by 2025, a more than 9 percent increase from its previous projection of $35.1 billion.
What else could be coming down the pike for this industry? Several top cannabis professionals and experts weigh in with their prognostications.
Josh Swider, co-founder and CEO of San Diego-based Infinite Chemical Analysis Labs, a provider of cannabis and CBD testing, believes regulation will become a more urgent priority. However, due to the stringent demands of quality control and testing, consumers should not expect to be buying cannabis in local stores anytime soon. „Businesses looking to enter the cannabis industry should expect to need a lot of capital in the early stages of the industry,” he explained. „It’s going to take time and money to bring quality products to market, and even longer to start seeing a return on investment.”
Narmin Jarrous, executive vice president of business development and director of social equity for Exclusive Brands, a Michigan-based cannabis retailer, echoed Swider’s sentiments. „I’d be surprised if states were able to draft legislation on the regulation of cannabis in their states and get businesses licensed and fully operational in a year,” she said. „I would think 2022 is more likely.”
What may expedite the process, Jarrous noted, is if the newly legalized states can look at Michigan “where the legislation and regulation of marijuana have gone fairly well and use that as a framework for their own regulatory bodies.” But even that is no sure-fire guarantee as Jarvis conceded that Michigan, which voted to legalize recreational use in 2018, is still not turning a profit from the sector—yet.
Rob Woodbyrne, CEO of California-based Regrow, a software provider for the cannabis supply chain, is far more optimistic than Jarrous as to when cannabis might hit the market in the newly legalized states. He predicts a state date on or before April 5, 2021. That will hinge, though, on whether rules and regulations have been put in place in these states before then. „This will be the only way to initiate important regulations, such as excise taxes, THC limits, DUI tolerances, testing protocols, license applications, possession and public use limitations and tracking and compliance regulations,” he said.
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The election results do push the needle closer toward federal legalization. „Just the sheer fact that you have heavily populous states like Arizona and New Jersey moving to adult use is significant,” said Andrew Smith, a senior policy advisor at law firm Foley Hoag, who has worked with cannabis clients on regulation. „These aren’t states that are considered traditionally progressive (even though New Jersey is a blue state). You also have deep red states like South Dakota and Montana allowing adult-use markets and obviously, Mississippi allowing a medical market, which is the first state in the Deep South to do so. [The industry] now cuts across partisanship. Two-thirds of the county now live in a state that has a [legal medical market].”