2020 is already taking shape as one of the most monumental years when it comes to legalizing recreational pot.
On January 1, Illinois became the 11th U.S. state to legalize recreational pot. Over the first 12 days of legalization in Illinois, dispensaries sold almost $20.0 million worth of cannabis products. Some stores even ran out of pot. (Source: “12 days, $20 million: Recreational Weed Sales Remain High in Illinois,” Chicago Sun Times, January 13, 2020.)
More and more states are lining up to legalize marijuana as the drug loses its stigma and becomes much more socially acceptable.
By all accounts, Illinois is just the first of many states that will legalize recreational cannabis this year. New Mexico is poised to legalize pot, and many believe New York could be next after that.
New Mexico Could Legalize Recreational Cannabis by March
On January 28, a New Mexico Senate committee approved a bill that would legalize recreational cannabis. (Source: “New Mexico Lawmakers Approve Marijuana Legalization Bill,” Marijuana Moment, January 28, 2020.)
That’s just the first hurdle; the bill needs to be passed by two other committees—Judiciary and Finance—before going to a full vote. It appears as though there’s going to be a sprint to the finish line, since the state’s 2020 legislative session ends soon.
The passing of the bill looks promising though, with Democratic Senator Jacob Candelaria saying he believes “2020 is the year New Mexico becomes the third state to enact legalization of cannabis through legislative action.”
If passed, it’s expected to be an economic windfall for New Mexico, creating up to 13,000 jobs and bringing in roughly $6.2 million in additional revenue in fiscal 2021. By fiscal 2024, that number is expected to rise to around $34.0 million. (Source: “Fiscal Impact Report,” Legislative Finance Committee, January 28, 2020.)
Municipalities and counties could also count on additional revenue coming in.
New York Could Legalize Weed in 2020
New York, the fourth most populous state in the U.S., could join the growing list of states legalizing pot.
In Governor Andrew Cuomo’s budget proposal for the new fiscal year, he included legalization that “establishes a regulated adult-use cannabis program that protects public health, provides consumer protection, ensures public safety, addresses social justice concerns and invests tax revenue.” (Source: “Cuomo amends marijuana legalization plan, but not enough yet for lawmakers,” The Buffalo News, January 26, 2020.)
According to Cuomo, the legalization of recreational cannabis is expected to generate $20.0 million in revenue in fiscal 2021 and $63.0 million in fiscal 2022.
Smoke Wallin, president of the marijuana company Vertical Companies, said those revenue projections are too conservative. He forecasts that, once the program is fully rolled out, annual revenue would be closer to $1.0 billion just in New York City. (Source: “Why New York’s Plan to Legalize Cannabis for Adult Recreational Use Is a Big Deal,” MarketWatch, January 21, 2019.)
Legalization in New York State would be a cornerstone for the entire cannabis industry. New York may only be the fourth most populous state, but it represents the most influential market for consumers.
And legalization in New York would put additional pressure on the federal government to legalize pot nationally.
This is the second time in as many years that Cuomo has introduced legislation to legalize recreational marijuana. A similar effort went up in smoke in 2019 when lawmakers were unable to agree on the details.
This year may be different though. New York has a large budget deficit that needs to be plugged. A new massive revenue stream, one that is already being enjoyed by other states, may be a big catalyst.
“I’m optimistic we can get this done in 2020,” said Senator Liz Krueger, a Manhattan Democrat. She said that, even if a bill can’t be passed as part of state budget talks, it could still get settled before the legislative session ends in early June. (Source: The Buffalo News, January 26, 2020, op cit.)
Support for the legalization of cannabis is at an all-time high in New York, with 58% of respondents in favor of legalization and just 38% opposed. (Source: “Overwhelming Support for a Dozen of Cuomo’s State of the State Proposals,” Siena College Research Institute, January 21, 2020.
2020 could be a watershed year for the U.S. cannabis industry, with up to a dozen states legalizing recreational or medical marijuana.
Even just five or six states passing legislation in 2020 could create a domino effect in the pot industry, injecting billions of dollars into the system. It would also go a long way to forcing Washington to legalize marijuana at the federal level.