By Max A. Cherney, marketwatch.com
Michigan and North Dakota will vote on recreational cannabis, Utah to vote on medical marijuana that can’t be smoked or eaten
California, Colorado and seven other states have legalized recreational marijuana, and there are roughly 30 states that have passed medical cannabis in some form.
On Tuesday, more states could be added to those lists, as two states consider approving recreational marijuana and two others vote on medicinal usage of the drug. While the votes should have little effect on Canadian marijuana companies, as most are precluded from having U.S. operations due to some exchange-listing guidelines, Michigan in particular holds intrigue for cannabis investors.
Here are the key races to watch
Michigan: With nearly 10 million people, the Great Lakes state is the largest to vote on legalizing recreational pot in this election cycle. Called Proposal 1, the law is straightforward: People 21 and older can have and use weed and the state will set up a system to regulate the licensing of growers and retailers. Local governments can elect to keep cannabis businesses out or restrict their operations. The ballot measure sets a 10% tax on pot sales.
Though Aurora Cannabis Inc. (ACB) (ACB) had to divest its holdings of U.S. companies earlier this year after the Toronto Stock Exchange threatened to delist the company, Aurora held on to an option to buy back stock in at least one former subsidiary, Australis Capital. Now listed on the Canadian Securities Exchange — a listing venue with fewer disclosure requirements — Australis, through one of its subsidiaries, is looking at the medical cannabis market in Michigan. Should Michigan vote in favor of legalizing adult use, Australis may be in a position to capitalize on the change through the work it has already done on the medical side.
Aphria Inc. (APHA) (APHA) has a similar option to buy back a stake in Liberty Health Sciences, which it divested earlier this year because of pressure from the TSX. Currently, Liberty Health operates in Florida.
North Dakota: Measure 3 in North Dakota, where medical pot is already legal, is unusual. While this initiative legalizes recreational marijuana, it doesn’t contain legislative language about taxes or regulations, leaving those aspects up to the state lawmakers. The ballot measure does, however, set the minimum age to purchase recreational pot at 21, erase pot convictions from criminal records and add punishments for selling weed to those younger than 21, among other things.
Utah: The state is set to legalize medical pot, except residents won’t be allowed to smoke, eat or grow weed. Utah’s Proposition 2 would legalize use for medicinal purposes, but users would not be allowed to smoke the plant (vaping appears to be OK by the wording of the law). State lawmakers have added two other measures that would replace or scrap parts of the proposition as part of a compromise meant to appease various groups in the state, and they would not allow for cannabis edibles nor growing of plants at home. Otherwise, Proposition 2 itself is somewhat standard: It gives patients the right to access medical pot for certain conditions and creates a system for licensing growers and shops.
Missouri: There will be three measures on the ballot in the Show Me State that legalize medical marijuana. Two change the state’s constitution, which means that if lawmakers want to change the marijuana laws once passed, they will have to put it to a state vote again. Each measure taxes the drug slightly differently, but all will let the state set up a system to license and regulate medical pot shops. The measures also include different qualifying medical conditions.
Other races: Pot legalization has not been transformed into a party plank for either Republicans or Democrats, but industry groups such as the National Cannabis Industry Association have been keeping close tabs on which races to watch in the House and Senate for potential federal action on cannabis prohibition.