November 16, 2020
Cannabis Legalization Approved in 5 Additional States
Posted by Mike Goral
|The presidential election certainly garnered most of the electorate’s attention on November 4. However, the results also signaled the growing public approval of cannabis, as all five states that had some form of cannabis legalization on their ballots approved it by a significant majority of voters. The five states are:|
- Arizona – adult-use cannabis was added to existing medical use
- Mississippi – medical use added
- New Jersey – adult-use cannabis was added to existing medical use
- Montana – adult-use cannabis was added to existing medical use
- South Dakota – medical used added
|These states alone are expected to generate more than $2.5 billion in sales, with total cannabis sales expected to reach $37 billion by 2024, according to Marijuana Business Daily. When the total impact is factored in, cannabis will provide an estimated $130 billion in stimulus to the U.S. economy.|
The recreational market now includes 15 states, and it is moving eastward at a rapid pace. Of particular interest is cannabis legalization in New Jersey, which will add pressure to its neighboring states of New York and Pennsylvania to convince their legislatures to approve adult-use cannabis. In addition, not lost on New Jersey voters was the tax impact that adult-use cannabis can bring to offset any proposed tax increases in individual and property taxes due to loss of revenue during the COVID-19 pandemic.
Prospects for federal legalization will no doubt remain elusive, at least in the near term, since there has traditionally been some resistance to passing any cannabis bills in the U.S. Senate. However, if the two U.S. Senate seats up for grabs in the January runoff election go in favor of the Democrats, this could help efforts to pass at least some safe banking legislation within the next two years.
This industry has always been in a state of flux. We anticipate that we will continue to see rapid developments that benefit the cannabis markets over the next several years.
If you have any questions, reach out to our experts.
Mike leads Armanino’s Cannabis Tax group. A tax professional since 1989, he has significant experience in federal, state and local tax from both an accounting and legal perspective. He spent time with multiple Big 4 firms, including serving in KPMG’s Washington National Tax Office, and has worked with cannabis companies both large and small in California, Nevada, Oregon, Washington and Colorado.
He advises cannabis clients on a broad range of issues that affect the space, including mergers and acquisitions, loan structuring, and funding mechanisms from venture capital, private equity and investment banking. Mike provides guidance on cannabis technology, manufacturing, transportation and retail issues, and literally wrote the book on Cannabis Taxation for Thomson Reuters.
Mike is the contributing editor of Cannabis Taxation a 250-page treatise for Thompson Reuters discussing the 33 states that tax cannabis sales. He is a member of the California Society of Certified Public Accountants, the National Cannabis Industry Association and the California Cannabis Association, which nominated him for their CPA of the Year award for 2019. He holds a B.S. in mathematics and psychology from the University of Alabama, a J.D. from Cumberland Law, and a Masters of Tax Law from Emory Law School.
Co Authors :
Jeremy has over twelve years of experience delivering internal audit, and consultative services to clients in a variety of industries. Jeremy manages teams and works closely with clients to analyze risks associated with information systems and business processes, implement controls and test those controls for operational effectiveness. He has extensive experience in developing and executing a detailed audit plan to test effectiveness of systematic and manual information system and business process controls. Furthermore, Jeremy is the leader of the firm’s GRC practice. Jeremy is a member of the Information Systems Audit and Control Association (ISACA) and has a B.A. in Business Administration, MIS Concentration, from California State Polytechnic University, San Luis Obispo.