Before we get to additional information on Cyber, we want to underscore the importance of the 2020 election to the cannabis industry. Next month, five states are voting on legalization of medical and recreational cannabis, and this can mean all kinds of rewarding new business opportunities — billions of dollars, in fact.
In Arizona, the ballot measure is labeled Proposition 207 (the Smart and Safe Arizona Act), and if passed it will expand the state’s current medical program to adult recreational use. This is a heavily-watched initiative as in 2016 voters narrowly defeated this measure, yet polls show far greater support this time out and the industry is optimistic. There would be a 16% tax on the retail sale of cannabis, which would be used to fund a number of state programs.
Existing medical operators would be able to apply for dual licenses, and not-for-profit operators would have the opportunity to convert to for-profit status. One additional provision would allow persons previously convicted of low-level possession to have their records expunged.
In Mississippi, ballot measures Initiative 65 and Initiative 65A (Missippians For Compassionate Care) would each legalize medical cannabis. Voters who choose to approve will have to select between the two alternatives; 65 is more liberal and would allow use by patients certified by a licensed physician, and 65A is more conservative as only terminally ill patients would have access.
The current state sales tax of 7% would apply. Dispensaries would be allowed to sell no more than 2.5 ounces of cannabis in 14 days per qualified patient. The vote is expected to be close; it would bring Mississippi into parity with its western neighbors Louisiana and Arkansas.
In Montana, ballot issue #14 I-190 (New Approach Montana) would legalize adult recreational cannabis and allow for resentencing or expungement of past convictions. This would put the state into parity with other mountain states Colorado and Nevada. Existing medical operators would have the first entry into the recreational category, and Montana residency would be required for all licensees.
Retail sales would be taxed at a 20% rate, and the majority of new revenue would go to state programs such as conservation and healthcare. Passage is likely according to recent polls that show a majority of residents supporting recreational legislation. The one wild card is that individual jurisdictions could still prohibit recreational cannabis sales by local election.
In New Jersey, Public Question 1 would legalize a commercial recreational cannabis program that right now is short on the details. If passed, lawmakers would develop the specific legislation and regulations. Passage is considered likely, as polls show residents favoring the legislation by a 3 to 1 margin.
The state has a 6.625% sales tax on adult use products, and individual municipalities would be able to add local taxes of up to 2%. Existing medical cannabis providers would likely get first crack at the new recreational licenses.
And in South Dakota, both medical and recreational cannabis are on the ballot: Measure 26 to legalize medical, and Amendment A to legalize adult use (South Dakotans for Better Marijuana Laws). Supporters were unable to get on the ballot in 2018, and medical initiatives were twice defeated in prior elections, so passage is generally viewed as unsure.
If passed, local jurisdictions could still prohibit operations in their communities or set limits on where dispensaries can be located. There would also be several restrictions on sales. A 15% tax would be imposed on retail sales.