7 top cannabis execs break down what marijuana's election sweep means for their companies and the industry's future in the US
- Voters overwhelmingly supported cannabis legalization on Election Day. Five states, including New Jersey and Arizona, voted to legalize marijuana.
- We spoke with top executives at 7 cannabis companies, including Curaleaf and Green Thumb Industries, about what this means for the industry and consumers.
- They say the wave of legalization sends a strong signal to the federal government that cannabis is here to stay. They also expect consolidation as cannabis companies scramble for control of the expanding map.
- For more stories like this, subscribe to Insider Cannabis, Business Insider's weekly cannabis newsletter.
While the results of the presidential election and control of the Senate hang in the balance, one thing is clear: Americans overwhelmingly support cannabis reform.
One-third of Americans will live in places where marijuana is legal for all adults over the age of 21, after four states voted Tuesday to legalize the drug for recreational use, and Mississippi backed legalizing medical marijuana. It's a massive shift from a decade ago, when no state had a legal recreational marijuana market.
"There are not many issues this country agrees on like they do with cannabis," Ben Kovler, the CEO of Illinois-based cannabis company Green Thumb Industries, told Business Insider. "It seems to be pretty universal."
Read more: Wall Street analysts pick the top 6 US cannabis stocks to bet on now to profit from a Biden victory and a wave of legalization
Charlie Bachtell, the CEO of US cannabis company Cresco Labs, agrees. "While there are still a lot of unknowns as it relates to the election, I think one thing we do know is that cannabis won last night," he told Business Insider.
Business Insider spoke to seven top executives at US cannabis companies to gain a deeper understanding of how the state legalization victories will affect the industry. The execs said it sends a strong signal to the federal government, no matter who wins the presidency, that legal cannabis is uniquely popular among voters and is here to stay.
'Another good year for cannabis'
Cowen analyst Vivien Azer summed it up in a note early Wednesday morning. "While results are still in play, make no mistake, like 2016, 2020 was another good year for cannabis," she wrote.
She said that the results of Tuesday's election added more than $3 billion to her predictions for the size of the US market in the near term. Her team says cannabis in the US will become a $34 billion industry by 2025, and could expand to $100 billion by 2030.
Read more: The ultimate guide to marijuana legalization: Here are all the states that passed cannabis reform, the key dates to know, and which stocks could benefit the most.
Including the ballot measures that passed on Tuesday, cannabis will soon be legal for medical purposes in 36 states, and for recreational use in 15.
Here's what happened in Tuesday's elections
- New Jersey voted to legalize cannabis for adults over age of 21. It's up to the state's legislature to pass laws governing the new industry.
- Montana will legalize the possession and use of less than one ounce of marijuana.
- South Dakota passed both medical and recreational cannabis at the same time, becoming the first state to do so.
- Arizona legalized recreational marijuana, after failing to do so in 2016.
- Mississippi passed Initiative 65, a far-reaching medical marijuana measure. Mississippi voters rejected a narrower medical legalization option on the same ballot.
- Last, Oregon passed two drug policy reform measures. One decriminalizes the possession and use of all drugs including cocaine and heroin, and the other legalizes psilocybin-assisted therapy. Washington D.C. passed a ballot measure decriminalizing plant-based psychedelics.
New Jersey is' the first domino falling in the Northeast'
Cannabis executives say New Jersey, with its proximity to New York City and Philadelphia, represents the biggest prize. And it could be a "tipping point" for other populous, economically powerful Northeastern states to legalize.
"I think it's put a lot of pressure on places like New York and Pennsylvania and Connecticut to do the same thing," Joe Bayern, the president of Boston-based Curaleaf, the largest US cannabis company by market value. "This is just the first domino falling in the Northeast, and we think the Northeast could be a really compelling market."
Still, they cautioned that the New Jersey ballot measure kicks it over to the legislature to come up with laws governing the new industry, meaning that consumers probably won't be able to buy cannabis legally in the state until well into next year. Other states could also be slow to follow.
Jason Ackerman is the CEO of cannabis company TerrAscend, which has a large presence in New Jersey. He said that although the state could be a "catalyst" for cannabis reform in the Northeast, states like New York and Pennsylvania will have to pass legalization through the legislature — a process that has failed twice successively in New York.
"It can be a little harder than people think to work through the legislative process," he said.
Still, cannabis companies are actively preparing for the Northeast to become a booming cannabis market.
Kim Rivers, the CEO of Florida-based Trulieve, says that while it's too early to say whether Pennsylvania and other Northeast states will pass recreational marijuana, the company is expanding its operations in Massachusetts, Pennsylvania, and Connecticut. (Pennsylvania and Connecticut allow medical cannabis).
Cannabis companies are scrambling for control of the rapidly expanding legal cannabis map
Arizona's embrace of recreational marijuana is another huge opportunity for cannabis companies — particularly for Harvest Health & Recreation, which is headquartered in the state.
"I can't overstate how big of a deal it is for our organization," Harvest CEO Steve White told Business Insider. He estimated that the state's market could eventually reach $2 billion.
Already, cannabis companies are jockeying for control of these new markets. AYR Strategies, a New York-based cannabis company, announced on Wednesday that it would acquire three dispensaries and a cultivation facility in Arizona.
Expect to see more deals like this as cannabis companies scramble to control the rapidly expanding legal cannabis map, executives say.
Read more: Cannabis companies are facing an uptick in audits related to an obscure Reagan-era tax rule, piling up costs and headaches for the growing industry
Akerman, of TerrAscend, said there's going to be a race to consolidate the industry. "There's lots of room for the top players to consolidate in these states," he said.