Marijuana Legalization: Puff-Puff-Pass-Ive Income

Key takeaways

• Five states are voting whether to approve the legalization of marijuana this election cycle
• If these measures pass, they’d join Washington, D.C., 19 states and two territories where recreational marijuana is already legal
• Historically, tax incomes have massively increased in legal states, buffing funding for programs and organizations like schools, public safety and healthcare
• Q.ai’s Guilty Pleasures Kit offers exposure to the legal marijuana industry for investors who want to ride the high to marijuana-induced wealth

Just a few years ago, the thought of states voting on legalization of marijuana was little more than a pipe dream. But after Colorado and Washington’s historic 2012 votes, a budding industry has bloomed in 19 states and Washington, D.C.

These midterms, five more states are voting to see for themselves if the grass is greener on the other side of the law…

Or if the other 19 have, to put it bluntly, gone to pot.

An industry in full flower

Historically, the legalization of marijuana has been a heated topic. While the war on marijuana has cooled somewhat, some believe that states permitting the cultivation and sale of a once-illicit substance has sticky connotations.

But as science has evolved to tout marijuana’s benefits, more voters are curious to TH-see what all the fuss is about. Nationwide, legalization of marijuana remains popular among a whopping 91% of voters. A whiff of easing federal regulations may further un-cloud the issue in the midterms.

Just a few weeks ago, President Joe Biden pardoned thousands charged with simple marijuana possession at the federal level. His decision was accompanied by a plea for state and local officials to pardon local offenders for similar charges. The administration is also reviewing marijuana’s status as a dangerous drug with no accepted medical use.

Though the drug remains illegal federally, nearly 40 states have legalized marijuana in some form. Most have seen surprisingly robust tax revenues as their legal markets bloomed into bustling industries worth $25 billion in 2021.

In 2020, Arizona, Montana, New Jersey and South Dakota joined the growing chorus of pro-marijuana jurisdictions. Now, five more states – including South Dakota again – are ready to cast their toke-n votes to determine if adult-use weed should be legal for more than half the nation.

Arkansas’s Issue 4

Arkansas first approved medical marijuana in 2016 with 53% “yes” vote. Now, the Natural State is asking voters to decide whether smoking permissions should extend to all over-21s.

If passed, Arkansas’s Issue 4 would allow adults to purchase up to one ounce of weed from authorized retailers. (The provision doesn’t permit home cultivation.) The number of dispensary licenses would increase from 40 to 120, while 20 non-medical cultivation licenses would be handed out.

The amendment would also repeal the state’s medical marijuana tax. In its place, Arkansas would excise a 10% sales tax on non-medical purchases. (One analysis suggests that 10% could add up to $460 million in tax revenues over five years.)

Of these funds, 30% would fund law enforcement, drug court programs and university research. The rest would pad Arkansas’ general coffers.

Maryland’s Question 4

Maryland legalized medical marijuana nearly a decade ago, in 2013. Decriminalization followed the next year for amounts of 10 grams or less. Since then, legislature has been unable to pass full-scale legalization – so it kicked the issue to the ballot box this year.

If Question 4 passes, Maryland adults will be allowed to possess up to 1.5 ounces of marijuana starting in July 2023. Adults could also grow up to two plants and gift cannabis products legally.

The law also includes several social equity components for those negatively impacted by past marijuana possession, including:

• Removing criminal penalties for possession up to 2.5 ounces
• Expunging criminal records for people arrested for possession
• Establishing pathways for individuals serving time for simple possession or intent to distribute to see their sentences reconsidered or records expunged

Additionally, Question 4 would establish the Cannabis Assistance Fund to support minority- and women-owned cannabis businesses

Missouri’s Amendment 3

Missouri decriminalized personal-use cannabis in 2014 and approved the legalization of marijuana for medical use in 2018. The state’s medical cannabis industry has since grown quickly – but Amendment 3 would supercharge that growth.

The ballot box proposal would allow adults to possess up to three ounces (or six flowering plants) for personal use. 144 new small businesses licenses would issue via lottery alongside the existing medical licenses, with no one entity allowed to control more than 10% of the state’s market.

A new 6% sales tax on recreational cannabis would fund automatic expungements for people convicted of certain nonviolent cannabis offenses. The rest would support substance misuse programs, veterans’ healthcare, and the state’s public defender fund.

North Dakota’s Measure 2

North Dakota voters greenlit medical marijuana in 2016, but full legalization failed to pass on the 2018 ballot.

Measure 2 hopes to give disjointed voters a second chance. If passed, Measure 2 would permit adults to possess up to one ounce of flower, four grams of concentrate or three plants.

The measure allows for seven cultivation licenses and 18 retailer licenses to accommodate increased demand. It further imposes a 5% sales tax on recreational sales, a $110,000 registration fee for manufacturers, and a $90,000 retailer fee to fund the program’s administration.

The proposal also includes child custody protections for parents who use marijuana responsibly. However, Measure 2 does not provide a pathway to expunge criminal marijuana convictions.

South Dakota’s Measure 27

South Dakota is unique on this list for a two big reasons.

First, the state actually passed a measure permitting the legalization of marijuana back in 2020. However, the South Dakota Supreme Court scrapped the measure, as it violated state requirements that constitutional amendments focus on one subject each.

Secondly, South Dakota’s Measure 27 is the only proposal that doesn’t establish a regulated market of some description. Instead, voters will vote on possession and home cultivation, while the state legislature would debate specifics later.

If passed, Measure 27 would permit individuals to possess up to one ounce of marijuana or three plants. The law makes no mention of taxation, licensing, or potential criminal record expungements.

That said, it does outline civil penalties for violating laws related to home growing or public consumption limits. Additionally, Measure 27 permits employers to prohibit cannabis use, while state and local jurisdictions could set their own bans even for otherwise-legal marijuana activities.

Q.ai dispenses return potential left and right

The possible legalization of marijuana in five more states isn’t just exciting for potheads and patients; investors should get excited, too.

As of March 2022, legalization has provided states with a combined $11.2 billion in sales tax revenue alone. That excludes profits from application and licensing fees, income taxes and corporate taxes. The actual profits these taxes are based on were estimated at $25 billion in 2021 – and the market hasn’t peaked yet.

For investors looking to hop on the ground floor, new legalization programs offer the perfect opportunity to light up (your portfolio). But instead of hashing out your investments on an individual scale, Q.ai offers a Kush-y alternative.

That’s right: we’re talking Guilty Pleasures.

Our AI-backed expertise can help you invest in marijuana legalization, gambling, sex positivity and more by weeding out the bad crops. What’s left is a primo spliff of expertly-trimmed investments designed to maximize exposure to top-shelf picks – without sending your dollars up in smoke.

So, if you’re looking to enjoy your guilty pleasures in a guilt-free environment, we won’t judge. In fact, your portfolio might (dare we say) dank you for the opportunity.

Download Q.ai today for access to AI-powered investment strategies. When you deposit $100, we’ll add an additional $50 to your account.