Adults Only: Cannabis Ballot Legalization 2022
What Happens in Ballot Initiative States Before & After the Election?
Update: November 9 – Congratulations to Maryland and Missouri for passing adult-use ballot initiatives. Join our post-election webinar on December 5 to learn about next steps and cannabis business opportunities.
With the culmination of the 2022 cannabis ballot legalization push upon us, we're focused on five states set for the polls this fall. Stakeholders should register to vote now, and commit the details of your cannabis measures to memory.
Back in 2020, New Jersey and Arizona passed adult-use, South Dakota was the first state to pass medical and adult-use legalization at the same time (though adult-use was later overturned by their courts), and Mississippi and Montana proved that support for medical access is nearly ubiquitous.
Now in 2022, we stand to see five additional adult-use programs legalized in the United States: Arkansas, Maryland, Missouri, North Dakota, and South Dakota. Come November, the total number of U.S. States with legalized adult-use cannabis could jump to 24. The number of medical states will hold steady at 38, since Oklahoma and Nebraska barely failed to make the ballot cut.
What Happens After a Ballot Measure Passes
If you’re an entrepreneur with an interest in starting a cannabis business in a ballot state, you’re likely excited to get licensed and launch your business. First, get a handle on the projected timeline for market rollout in your state and plan accordingly.
Since the five states in contention this year are all adult-use markets, they are expected to roll out quicker than typical medical markets. Generally, a state will allow current medical operators to enter the adult-use market with a simple application and then release a separate application acceptance window for new licensees with more thorough requirements.
From our last election year, only New Jersey and Arizona passed and launched adult-use programs. New Jersey permitted medical businesses to start selling adult-use cannabis on April 21, 2022. New Jersey took only a year from passage to start accepting license applications, though the market is still extremely limited since the new non-medical licensees are not fully operational. Arizona, on the other hand, opened their adult-use market in a flash on January 22, 2021, and only permitted medical businesses to take part — new licenses were awarded to social equity applicants via lottery in April 2022.
A state or department may release a projected rollout timeline, but take it with a grain of salt. You’ll want to keep your finger on the pulse of the regulatory progress for changes and on stakeholders for clues about the realistic timeline. From our experience, states won’t make progress sooner than projected and will often blow past deadlines without explanation.
What Will Adult-Use Business Operations Look Like
The five states with cannabis legalization on the ballot – Arkansas, Maryland, Missouri, North Dakota, and South Dakota – offer varying business situations.
Assuming these pass at the polls, which is not a given, we’ll see additional regulations and licensing events over the next couple of years.
Limited Licenses in Arkansas
In Arkansas, voters would amend the state constitution to allow adult-use sales to begin in March of 2023. Arkansas is business friendly, with limited licensing and prohibitions to protect businesses from municipal impediments. If passed, the state will issue 40 dispensing and 12 cultivation licenses.
Arkansas has historically been a bureaucratic market, but with a patient adoption of 3% – about 92,000 patients out of a population of 3 million – and strong sales, it's ripe with opportunity.
Maryland Lacks Regulations & Details
In Maryland, voters would also amend the state constitution. The bill would legalize adult-use cannabis possession as of July 2023 — a few months after Arkansas.
While an accompanying bill is already written, it doesn’t cover the licensing process or limits, and delays could give the illicit market an advantage.
Microbusiness & Limited Licenses in Missouri
In Missouri, a minimum of 144 new licenses would be issued, including a new one for microbusinesses.
While licenses are limited, the market is already developed at a nearly adult-use level with almost 400 medical cannabis business licenses in existence. The new measure would also expand participation of disadvantaged populations.
Missouri boasts above-average patient adoption of 3.3% – about 203,000 patients out of a population of 6 million – signaling regulatory and public acceptance of the market.
Two Limited License Types in North Dakota
In North Dakota, the proposed statutory change creates two limited license types — 7 manufacturing licenses and 18 dispensary licenses. It would give regulators until October 1, 2023, to establish the program to regulate the production and distribution of adult-use cannabis.
Of all the deadlines imposed by pending ballot measures, this one seems the most likely to be missed. For comparison, New York legalized in March of 2021 and still has not released full program regulations over a year and a half later.
Implementation Support from Leadership in South Dakota
In South Dakota, they hardly have the medical program rolled out and the new measure doesn’t establish a framework for adult-use retail sales. Thus far, the competitive advantage has gone to Native American Reservation businesses, and the first medical dispensary licensed outside of the reservation just opened in July 2022 – almost two years after legalization.
A big change from 2020, Governor Kristi Noem (R) said in a debate that she would implement legalization of marijuana this time if voters approve it on the ballot again.
What You Can Do Now to Plan Your Cannabis Business
Of course, VOTE.
If you want to open a business in one of these new states, there is lots to be done, and you’ll need a skilled team to compete. Look for local partners ASAP, make or strengthen community connections, and brush up your business plan to present to investors soon. While it might be unwise to purchase a property already, it's never too early to start laying the groundwork to make things easier for yourself down the road.